Oil
Iran Expects Crude Exports to China to Stabilize
SHANGHAI — Iran expects its crude-oil exports to China will stabilize despite political pressure from the U.S. and a drop in shipments so far this year, an executive at Iran’s state oil company said.
China’s October crude imports from Iran fell 42% to 1.06 million metric tons, or 390,000 barrels a day, from the same period a year earlier, Chinese customs data showed Thursday. The steep drop in October brings China’s Iranian crude imports to 17.1 million tons in the January to October period, down 3% from the same period last year.
The drop makes it increasingly likely that Washington and Beijing will avoid a clash over imports from Iran.
However, the decline may be only temporary, said Maziar Hojjati, managing director of the China office of National Iranian Oil Co. He expects imports will recover in December and end the year almost unchanged compared with last year.
“There were technical issues at some Chinese refineries that prevented [imports] last month, but we hope that by the end of the year, we will fully supply our contracted volumes,” he said on the sidelines of a conference in Shanghai.
October’s import numbers are significant because they will be used by the U.S. State Department in deciding whether Beijing qualifies for a renewal of its waiver from sanctions, which expires in late December.
The U.S. has stepped up sanctions against Iran over the past decade in response to Western charges that Tehran is seeking to develop nuclear weapons—charges the Iranians deny. In late 2011, Congress passed a law penalizing financial institutions that conduct oil trades with Iran’s central bank by banning them from doing business in the U.S.
However, the State Department has been given the flexibility to exempt countries that show a “significant”—though unspecified—reduction in Iranian crude purchases. That has stemmed run-ins with fast-growing Asian countries that depend on Iranian oil.
In a daily press briefing on Thursday, China Foreign Ministry spokesman Hong Lei said Iran’s oil cooperation with China “is transparent and legal and is not against the relevant regulations of the United Nations.”
China, which relies on Iran for about 7% of its crude imports, won its third exemption from sanctions in June. The exemption came even though Iranian crude imports between January and April—the period used to determine the exemption—were up 11% from the same period last year.
Nuclear talks resumed this week in Geneva between Iran and the five permanent members of the U.N. Security Council, which include the U.S. and China.
China already cut its crude imports from Iran by 21% in 2012 from 2011. Analysts and industry insiders say they didn’t expect China to be able to reduce imports any further because reconfiguring a refinery to process another type of crude isn’t easy.
Meanwhile, China’s imports of Iranian fuel oil have surged this year, a practice the U.S. doesn’t take into account when determining the waiver. China imported an additional 180,000 tons in October, bringing total imports this year to 1.4 million tons worth $840 million, customs data shows.
China has a significant amount of small refineries, called teapot refineries, that are configured to process fuel oil—a cheap byproduct of refining—rather than crude. This gives China the ability to make more valuable fuels such as gasoline and diesel without the need to raise crude imports.
– WALL STREET JOURNAL
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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