Oil
Oil slips below $109 after touching five-week high
DUBAI – Brent crude eased back after hitting a five-week high above 109 dollars a barrel on Monday as investors bet the U.S. central bank would maintain stimulus measures to support demand.
The new head of the Federal Reserve, Janet Yellen, delivers her first testimonies to Congress this week and markets expect her to indicate monetary policy will stay loose.
Economists assume Yellen will say gradual tapering of asset buying is likely as long as the economy continues to improve.
This view was reinforced on Friday by disappointing U.S. employment data, showing job creation slowing to its weakest in three years and suggesting U.S. economic growth may be losing momentum.
“Oil has spiked up on expectations that tapering of asset buying will not be accelerated,” Commerzbank head of commodities research Eugen Weinberg said.
But Weinberg said oil could be close to the top of its range for a while.
Presently, U.S. crude futures are edging up towards 100 dollars per barrel and North Sea Brent is not far below 110 dollars.
Both contracts jumped more than two dollars on Friday, but eased on Monday.
March Brent crude fell 60 cents to 108.97 dollars a barrel, down from a session high of 109.75 dollars, its loftiest since Jan. 2.
U.S. crude was down 50 cents at 99.38 dollars, after rising to 100.46 dollars, a 2014 high.
Brent could be supported by tighter North Sea supply this year as Britain’s biggest oilfield, Buzzard, undergoes a total nine weeks of maintenance in 2014.
Chinese economic data this week could also be supportive if it shows faster growth in the world’s second-biggest oil user.
“The overall picture of the economy remains one coming out of recession and quite clearly in recovery mode,” CMC Markets chief strategist Michael McCarthy said.
But analysts are wary after the recent run-up in oil prices.
“We are striking resistances on both charts,” McCarthy said. “I suspect that’s containing the exuberance in the market.”
An easing of geopolitical tensions over Iran’s nuclear programme could also weigh on oil prices.
Oil supply from the OPEC producer may rise if Tehran reaches a final deal with world powers.
Iran has agreed to start addressing suspicions that it may have worked on designing an atomic weapon, the U.N. nuclear agency said on Sunday.
Iran and six world powers are due on Feb. 18 to start a final round of talks aimed at reaching a broader diplomatic settlement with the Islamic state
– REUTERS
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
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.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
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.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
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.