Oil
US to surpass saudi as top oil producer by 2016 – IEA
LONDON – The United States will stride past Saudi Arabia and Russia to become the world’s top oil producer by 2016, the West’s energy agency said, bringing Washington closer to energy self-sufficiency and reducing the need for Organization of the Petroleum Exporting Countries (OPEC) supply.
But by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East will regain its dominance—especially as a supplier to Asia, the International Energy Agency (IEA) said on Tuesday.
The IEA, which advises large industrialised nations on energy policy, predicted in its 2012 World Energy Outlook the United States would surpass Riyadh as top producer in 2017.
Introducing this year’s outlook, IEA chief economist Fatih Birol said the agency now expects the re-ordering by 2016— at the latest.
“We see two chapters in the oil markets. Up to 2020, we expect the light, tight oil to increase— I would call it a surge. And due to the increase coming from Brazil, the need for Middle East oil in the next few years will definitely be less,” he told Reuters in an interview.
“But due to the limited resource base (of US tight oil), it is going to plateau and decline. After 2020 there will be a major dominance of Middle East oil.”
The IEA said oil prices would continue to rise and spur development of unconventional resources such as the light, tight oil that has fueled the US oil boom, oil sands in Canada, deepwater production in Brazil and natural gas liquids.
Oil prices will climb steadily to $128 a barrel in 2012 terms by 2035 —up $3 from 2012’s outlook.
Other nations are unlikely to match the success of the United States in tapping shale.
While tight oil output is set to soar in the next few years, the Paris-based agency said the world was not “on the cusp of a new era of oil abundance”.
By the mid-2020s, non-OPEC production will fall back and countries in the Middle East— home to core members of the OPEC— will provide most of the increase in global supply.
Birol said it was essential that investments continue to be made in the plentiful, low-cost resources of the Middle East in order to meet growing demand from Asia.
“The Middle East is and will remain the heart of the global oil industry for many years to come,” he said.
“Giving the wrong signal to Middle East producers may well delay investment. If we want Middle East oil in 2020, the investments need to be made by now.”
Rising US tight oil production is for now helping to meet growing demand, which the IEA forecasts will reach 101 million barrels per day (bpd) in 2035, a rise of 14 million bpd and up slightly from 99.7 million bpd expected last year.
“Shale oil is very good news for the United States and for the world. But the demand is in Asia,” Birol said.
“First China, and then after 2020 driven by India. Therefore we need Middle East oil for the Asian demand growth.”
China is due to overtake the United States as the largest oil-consuming country and Middle East oil consumption is expected to surpass that of the European Union, both around 2030, the IEA said.
India is forecast to become the largest single source of global oil demand growth after 2020.
The share of the United States in global energy-intensive industries — chemicals, aluminium, cement, iron, steel, paper, glass and oil refining – will increase slightly thanks to cheaper energy.
By contrast, the EU and Japan will lose one third of their current share.
The IEA also said that up to 10 million bpd of global refining capacity was at risk as global refining centres were relocating closer to Asia.
– REUTERS
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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