Oil
OPEC maintains crude-production target at Vienna talks
DUBAI – Energy ministers from Organisation of Petroleum Exporting Countries (OPEC) agreed this week to keep the group’s target for crude output unchanged at 30 million barrels a day.
“We have rolled it over,” Saudi Arabia’s Ali al-Naimi told reporters after three hours of closed-door talks finished in Vienna, Austria, saying “we are all satisfied.”
Maintaining the current target for the 12-nation group will ensure stability of oil prices, Venezuela’s energy minister Rafael Ramirez said. The cap adequately matches demand and is unlikely to change much in 2014, Suhail Mohammed Al Mazrouei, the oil minister for the United Arab Emirates, said shortly before the talks began.
Some analysts warn that excess supply, including US shale oil and a potential resurgence in exports from Iran, Libya and Iraq, may push prices lower next year if production cuts aren’t made. Brent crude has settled above $100 a barrel for all but five days this year.
OPEC will hold its next meeting June 11, Al-Naimi said. The group also agreed to extend Secretary-General Abdalla El-Badri’s term by one year, he said. The Libyan official has already served an additional 12 months after the group failed to select a successor from among three candidates last December.
Al-Naimi said before the closed-door meeting that 30 million isn’t too much for OPEC to target. He also said there’s no need for Saudi Arabia to cut its own production level. The kingdom is OPEC’s biggest oil exporter and produced 9.65 million barrels a day last month, according to a Bloomberg survey.
Brent crude, the benchmark used to price more than half of the world’s crude, has averaged $108.57 since the start of the year, compared with $111.68 in 2012 and $110.85 in 2011.
The Centre for Global Energy Studies in London and Citigroup Inc. in New York have forecast that Saudi Arabia and its allies Kuwait, Qatar and the UAE would have to reduce production by 1 million to 2 million barrels a day in 2014 to prevent a glut and keep prices stable.
In the past two years, Saudi Arabia has adjusted its own production without any change to OPEC’s formal output ceiling.
“Considerable supply-side risks in OPEC” mean the group will probably need to cut output only by 600,000 barrels a day next year, which is within Saudi Arabia’s capability to do alone, according to Harry Tchilinguirian and Gareth Lewis-Davies, analysts at BNP Paribas SA.
“In addition to continuing problems in Nigeria, the planned incremental supply from Iraq may not emerge due to civil unrest, a recovery in Libyan output in the near-term is unlikely, Venezuelan political unrest is a concern and we believe the re-emergence of Iranian barrels remains some way off,” the BNP analysts said in a report this week.
The US is pumping the most in almost a quarter century amid surging production from shale formations. It will surpass Russia and Saudi Arabia to become the world’s largest oil producer for a few years from about 2015, the International Energy Agency said last month.
OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela.
– BUSINESS DAY
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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