Oil
ExxonMobil ‘set for Greenland exit’
SAN FRANCISCO – ExxonMobil is set to pull out of exploration in Arctic waters off Greenland and is not said to be among bidders in the country’s latest licensing round, with block awards likely to be issued shortly, according to a report.
The country’s Bureau of Minerals & Petroleum (BMP) could make an announcement before Christmas regarding awards for 19 blocks on offer off north-east Greenland under the round, ahead of a scheduled date of 15 January 2014, Danish online publication business.dk reported.
There is likely to be keen competition for the frontier tracts, covering a total area of almost 50,000 square kilometres and estimated by the US Geological Survey to hold potential hydrocarbon resources of 31 billion barrels of oil equivalent.
Bidders believed to be in contention include heavyweights BP, Shell, Chevron and Statoil, but ExxonMobil – the world’s biggest oil company – has decided not to participate in the round, the publication reported, citing industry sources.
The US giant has also relinquished one concession held off west Greenland and is set to hand back another to the authorities as it refocuses its efforts on exploitation of North American onshore shale resources, the report stated.
Despite the promise of high resource potential, the Greenland blocks on offer will require spending of around $500 million on seismic surveys and drilling of up to two exploration wells over the 16-year licence term, according to BMP director Jorgen Hammeken-Holm.
However, he does not expect drilling to kick off for at least another 10 years due to the need to develop new technology to tackle challenging Arctic conditions off east Greenland including extreme sub-zero temperatures, icebergs and year-round ice.
While ExxonMobil has yet to confirm its withdrawal,a spokesman underlined the company remains strongly involved in Arctic exploration in different parts of the world including Canada and Alaska, as well as through a tie-up with Rosneft for work off Russia where it plans to drill in the Kara Sea next year.
“It is more a question of where we will prioritise funds for exploration,” he told Upstream.
Arctic exploration to date has not been without its challenges for industry players, while also provoking protests by environmental groups such as Greenpeace.
French giant Total has warned against Arctic exploration, with chief executive Christophe de Margerie claiming the environmental risks are too great and that an oil spill off Greenland would be a “disaster”, not least for an oil company’s public image.
Anglo-Dutch Shell supermajor Shell carried out an abortive drilling effort in Alaska last year that was dogged by technical issues and a rig grounding, while Norway’s Statoil is stalling on its exploration plans off the US state.
Shell intends though to reboot its exploration work off Alaska next year using Transocean semi-submersible Polar Pioneer.
UK independent Cairn Energy failed to make a discovery during an earlier extensive two-year, multi-billion dollar campaign off west Greenland in 2010 and 2011 that is believed to be one of the most costly ever carried out by an explorer.
Costs for drillers are set to be exacerbated by Greenland’s stringent safety rules, including a requirement for an extra rig to be available for drilling of a relief well in the event of a blowout as well as heightened demands for blowout preventors.
ExxonMobil is currently part of Greenland’s Kanumas group of operators – also including Statoil, BP, Chevron, Shell, Japan Oil, Gas & Metals Corporation and state-owned Nunaoil – eligible to bid for 11 of the 19 blocks on offer in a pre-licensing round, with any unawarded tracts to be transferred to the ordinary round.
– UPSTREAM
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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