Verheijen: The Driving Force Behind Tinubu’s Energy Reforms
By William Emmanuel Ukpoju
In the complex landscape of national energy policy and implementation, having a capable advisor is crucial for success. President Bola Ahmed Tinubu’s administration has committed to address pressing energy challenges, and one key figure in the government that is making giant strides in this regard is the Office of the Special Adviser on Energy to the President.
The Office of the Special Adviser on Energy is tasked with providing expert advice and guidance to the President on matters related to energy policy, strategy and development. The office plays a crucial role in formulating and implementing policies aimed at enhancing the country’s energy security, promoting renewable energy sources, and ensuring access to affordable and reliable energy for all citizens. Additionally, the office is also mandated to engage in advising on energy infrastructure projects, fostering international partnerships and addressing energy-related challenges and opportunities facing the nation.
Valuechain reports that since the return of democracy in 1999 several notable individuals have held the position of Special Adviser to the President on Energy (or Petroleum and Power as the case may be). Late Dr. Rilwan Lukman and Prof. Anthony Adegbulugbe served as Special Advisers on Energy during the administration of former President Olusegun Obasanjo. Former President Umaru Yar’Adua (late) appointed Emmanuel Egbogah (late) as Special Adviser on oil, Engr. Joseph Makoju, as Special Adviser on Electric Power. Prof. Abubakar Sambo and Dr Joseph Thlama Dawha (late) served under former President Goodluck Jonathan as Special Adviser on Energy Matters while Prof. Barth Nnaji served briefly as Special Adviser on Power. Under former President Muhammadu Buhari, Amina Ado and Dr. Yusuf Ali served as Senior Special Assistant to the President (Oil & Gas Policy) and Special Assistant to the President (Power Regulations) respectively. These advisers worked on initiatives related to energy policy, infrastructure development, and sustainability, playing key roles in formulating energy policies, implementing energy infrastructure projects and attracting domestic and foreign investment in the energy sector.
However, at no time has the Office of the Special Adviser to the President on Energy occupied such a prominent position in Nigeria’s quest for energy security, sustainability, and prosperity, than presently under the stewardship of Olu Verheijen, President Tinubu’s Special Adviser on Energy. As Nigeria embarks on its energy transition journey, the guidance and initiatives spearheaded by Verheijen, are leaving a lasting impact.
Tasked with navigating the intricate web of challenges and opportunities in the energy sector, Olu Verheijen has emerged as the driving force behind the transformative initiatives in the energy sector in the country.
Championing interventions
Verheijen has played a crucial role in spearheading the energy sector reforms that are crucial for enhancing the sector’s contribution to Nigeria’s socio-economic development. Since her appointment in June 2023, Verheijen’s approach has been characterized by a blend of visionary leadership and pragmatic problem-solving. The Office has worked on developing and implementing regulations aimed at creating conducive environment for investment.
In keeping with efforts to remove obstacles to investments, harness the nation’s resources and diversify the economy, the Office played a critical role in the recent execution of Policy Directives by President Bola Ahmed Tinubu, to improve the investment climate and position Nigeria as the preferred investment destination for oil and gas in Africa.
Following extensive engagements, analyses, and benchmarking with other jurisdictions, the President recently initiated the amendment of primary legislation to introduce fiscal incentives for oil & gas projects, reduce contracting costs and timelines, and promote cost efficiency in local content requirements. Recognizing the urgency to accelerate investments, the President directed as follows:
(1) Introduction of fiscal incentives for non-associated gas, midstream and deep-water developments.
(2) Streamlining of contracting process to compress the contracting cycle to six months.
(3) The application of the local content requirements without hindering investments or cost competitiveness.
These incentives were developed in collaboration with the Ministry of Justice, Finance, Petroleum, Budget and Economic Planning, Federal Inland Revenue Service, the Nigerian National Petroleum Company Limited, the Nigerian Upstream Petroleum Regulatory Commission, the Nigerian Midstream and Downstream Petroleum Regulatory Commission, and the Nigerian Content Development and Monitoring Board. The Special Adviser to the President on Energy is to continue coordinating these stakeholders to ensure the implementation within the stipulated timeframe.
Giving reasons why President Tinubu signed the Executive Orders (fiscal incentives for non-associated gas, midstream and deep-water developments) Verheijen pointed out that the steps taken by the President were to make gas readily available to Nigerians at affordable rates and reduce dependence on petrol and diesel.
The Presidential Aide explained that the Fiscal Incentives for Non-Associated Gas (NAG), Midstream and Deepwater Oil and Gas Developments are aimed at facilitating the monetization of Nigeria’s extensive oil and gas resources.
On the Executive Order on streamlining of contracting process to six months, Verheijen said the directive should have the effect of compressing the contract cycle to less than six months in line with global averages. This will expedite the delivery of oil and gas products to the market and enhance overall value for the country.
On Local Content Practice Reform, she said “this directive aims to reduce the cost premium of operating in Nigeria, presently averaging at 40 per cent. We anticipate significant benefits from this reform, including the development of local companies’ capacity, thereby generating additional business opportunities, job creation and boosting economic growth.”
On how the new policies would be implemented for effective results, the presidential aide explained that the assignments had been shared among different levels of government agencies to be followed up by her office.
Furthermore, the Office of the Special Adviser to the President on Energy has seen to the reforms in the electricity value chain. With the new Electricity Act signed by President Tinubu further empowering the Nigerian Electricity Regulatory Commission (NERC), the government in April, withdrew subsidy from the tariff of consumers on the Band ‘A’ category, which constitutes about 15 per cent of the total 12.82 million power consumers across the country. The withdrawal of subsidy which led to a new cost-reflective tariff will result in a significant reduction in the electricity subsidy bill of the government to an aggregate of N1.14 trillion in 2024.
Commenting on some of the government’s plans for the electricity value-chain during her participation at the 2024 edition of CERAWeek in Houston, United States in March, Verheijen said the government has introduced several creative initiatives which were being implemented to de-risk the power sector in Nigeria.
She said, “We are making sure that we actually creatively target certain aspects that we think are catalytic to the rest of the entire value chain.”
“We say we need about $10 billion to double our transmission capacity, we don’t have that, but maybe we have a fraction of that and we can actually then make sure we procure meters, convert all of the six million customers into paying customers with digital technology and smart meters and make sure we grow revenue that way.”
“So, that’s an example of how we’re being extremely strategic about the level of interventions that we have within our limited fiscal space. Once that is done and we have closed the metering gap, you have to address the financial liquidity issues that tend to be. When you’ve de-risked that entire value chain, we can then have more capital to that grid and then expand access and grow consumption.”
In addition to actively seeking input from diverse stakeholders to address concerns related to energy reforms, the Office has continued to facilitate partnerships between the government and private sector stakeholders to mobilize resources and expertise for energy projects. The Office, in partnership with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), last September, wrapped up a series of strategic engagements with fifteen (15) leading international and independent Oil and Gas companies operating in Nigeria, including Chevron, Total, Shell, NAOC, Exxon Mobil, Seplat, Heirs Holdings, Waltersmith, First E&P, among others. With the conclusion of these consultations, it is anticipated that 13.5 billion in short-term investment components, currently in the pipeline, will pave the way for the delivery of 2.1 million barrels per day production by December 2024, barring any unforeseen challenges. According to the Office, these talks are expected to result in significant investment opportunities with an estimated $55.2 billion in investments projected by 2030, of which $13.5 billion is expected to be invested by these companies within twelve (12) months from now.
Commenting on this initiative, Verheijen said, “These strategic, high-level engagements with oil and gas producers will help fast-track bold reforms that will unlock investments required to restore and grow oil and gas production in the short, medium, and long term.”
A glimpse into Verheijen’s rich profile
Olubukola Arowolo Verheijen was appointed as the Special Adviser on Energy to President Bola Ahmed Tinubu, in June 2023. She obtained her B.A. degree from Long Island University and a Masters in Public Policy from the Harvard Kennedy School of Government.
She has nearly 20 years of experience in the gas and renewables sectors across Sub-Saharan Africa and served as the Managing Director at Latimer Energy, a consulting firm advising clients on value optimization in the acquisition, development, and management of energy assets and opportunity screening.
She has also provided support to the Nigerian government in formulating policies and reforms that promote investment in gas infrastructure for domestic markets and was Shell’s finance Lead on the negotiations for Nigeria’s first World Bank Partial Risk Guarantee (PRG) to improve bankability of gas supply to state-owned power plants.
Verheijen is the founder of BFA Foundation which provides scholarships for women and other disadvantaged groups to expand their career advancement opportunities in high-growth sectors, including the energy sector.
Overall, Verheijen’s appointment as the President’s Adviser on the Energy sector is well-deserved, given her extensive experience and track record in the industry. Her diverse background and expertise in various energy sectors make her an asset in formulating strategic policies and driving sustainable economic growth in the energy sector.
Looking ahead, the giant strides of President Bola Ahmed Tinubu’s Special Adviser on Energy serve as a testament to the transformative potential of visionary leadership and strategic planning in driving sustainable development. As Nigeria continues its journey towards energy security, resilience, and sustainability, the advisor’s innovative approach and unwavering dedication towards ensuring that due process is upheld at all times especially when formulating policies; will undoubtedly remain instrumental in shaping the country’s energy future.
