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Total Increases South Africa Push

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JOHANNESBURG — French oil company Total said Tuesday it will spend hundreds of millions of dollars on exploration drilling in South Africa this year.

Total has a 50% share in a permit to explore off the southern coast of South Africa with Canadian Natural Resources Ltd. Total’s chief executive for South Africa Christian des Closieres said the drilling will begin later in the year. The company is also in discussions with the South African government to acquire a second exploration permit but “issues need to worked out,” he said. The outcome of those talks is dependent on how a government overhaul of the country’s mining and petroleum legislation, currently being discussed, plays out.

As part of Total’s push to increase its focus on oil exploration in South Africa, the company is selling two coal assets in the country. The company hired Deutsche Bank DOD +0.17% to carry out the sale and plans to complete the process by the end of 2014. The coal mines produce around 4 million metric tons a year for export.

Total Increases South Africa Push“We have chosen Africa to be at the forefront of our business development strategy,” Mr. des Closieres said in an interview Tuesday. “Our exploration strategy is now more aggressive.”

Developing an oil and gas industry would be a huge benefit to South Africa, which has to import roughly 70% of its oil needs from the rest of Africa and the Middle East. Other large multinational oil players such as Royal Dutch Shell PLC and Exxon Mobil Corp. XOM +2.93% have rights to explore for gas off South Africa’s coast. Shell and Chevron Corp. CVX +0.86% are also looking at shale gas in the country’s Karoo region in the southern part of the country and South Africa said it should publish regulations for shale gas by the end of the year.

South Africa isn’t alone in the region to draw big exploration spending. This week, Namibia’s energy minister said Shell has received the right to explore off its shores. In Mozambique, Italian energy company Eni ENI.MI -0.46% SpA and Texas-based Anadarko Petroleum APC +0.02% are developing a large gas find off the northern coast. Total too has a right to explore in the country but Mr. des Closieres said the company “needs to know more about the conditions of legislation.” Mozambique is reviewing its mineral and tax codes.

In South Africa, the government is drawing up amendments to the country’s mineral and petroleum law, including a proposal for a government stake in new oil and gas production. Last month, Minister for Mineral Resources Susan Shabangu said the state will take a 20% stake for free in all future oil and gas projects and that it’s “non-negotiable.”

Mr. des Closieres said the amendments will apply to future licenses.

“When we start drilling we need to know the terms. It’s good that the 20% is known. What we don’t want to see is it to change in the future,” he said.

There are a number of new exploration risks for Total as it begins drilling later in the year in South Africa. Not only is the drilling in deep water, but the current is strong.

– WALLSTREET JOURNAL

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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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.

Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones

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.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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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.

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Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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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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