Oil
Total developing projects as Shell sales show IOCs views diverge
LAGOS-International Oil Companies (IOCs) playing in the Nigerian oil and gas space are showing divergent views on the attractiveness of assets as some are moving on with developments while others divest.
Royal Dutch Shell Plc , Europe’s largest oil company, said yesterday it is advancing plans to sell four fields in Nigeria, to meet a $15 billion asset-sales plan, even as French Oil major Total told newsmen that it was moving ahead with projects in the country, despite the uncertainty from the late passage of the PIB.
Shell Petroleum Development Co. of Nigeria Ltd. said assets under consideration for sale are OMLs 18, 24, 25, 29 and the Nembe Creek Trunk Line, although the process has not yet concluded.
The Anglo-Dutch company and partner, Eni SpA are close to selling the Nigerian assets for about $5.2 billion, the Financial Times reported yesterday, citing two people familiar with the situation it didn’t identify.
However, despite the delay in the passage of the Petroleum Industry Bill (PIB) Total Upstream Nigeria said it is going ahead to embark on aggressive projects development and exploration activities very soon, to boost oil production in the country.
According to the company it has become expedient now to increase reserve in order to up what it has and optimise production of hydro carbon resources.
It said waiting indefinitely because of the delay in passage of the Petroleum Industry Bill (PIB) can only further complicate things, since inflation and other cost related issues would continue to impact negatively on the projects.
Elisabeth Proust, managing director of the company, in an interview with BusinessDay, said that her company has continued to execute projects inspite of the brouhaha over the delay in the passage of the Bill because the terms and conditions governing the projects have never changed.
She said the management of the company is very confident that the existing productions, projects already launched, the governments and legislators globally would respect and not modify the terms already agreed to . “All the projects such as Ofon and OML58 are almost being completed. But for Egina we are at midway,” Proust added. The projects, she explained have been sanctioned, based on the understanding that the agreed terms would not change.
“We need to move ahead despite issue with fiscal terms and improve upon our reserve base for the benefit of the country and company,” she said.
She said what has been delaying the execution of some of the projects have been shortage of funds. “Most times the projects are included in the budgets but when there is shortage of funds the projects are shelved and the money is diverted towards maintenance of the existing producing assets,” she said.
She however cautioned that unnecessary delay in project implementation could lead to increase in the cost of the projects. This she said could jeopardise the projects take-off.
In recent times, the company has commissioned projects such as Akpo, Usan, Ofon phase 11 and Amenam.
On gas development she said that the company would achieve zero gas flare by January 2015 as the Ofon phase 11 projects that would tie all gas from other installations would have been completed
“We have one major installation where we are flaring gas, and this is Ofon, but this would stop by January 2015. The shutdown was planned for December but I want to be careful because even though we meant December, it could be extended to the second week of January 2015. Other installations are connected to the gas system and so we would have zero gas flare,” she said.
BUSINESSDAY-
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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