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Nigerian Govt to review ExxonMobil’s Erha and Total Egina oil projects …refutes allegations of stalling Projects

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By Joseph BAMIDELE
ABUJA: The Management of the Nigerian National Petroleum Corporation, NNPC has announced plans to review the ExxonMobil’s Erha North Phase 2 and the Total’s Egina oil fields in order to take a second look at the high cost estimates of both projects and also shore up the federal governments take from the oil fields.
The Corporation has also aided eyebrows on media reports credited to some International Oil and Gas Companies; IOC’s accusing it of deliberately stalling the execution of some multi-billion dollar projects in the sector.
The NNPC held that it will not be stampeded or browbeaten into abandoning its firmly established process of contract award by what it termed calculated media blackmail ostensibly by the IOCs and other interested parties.
In a statement signed by the Acting Group General Manager, Group Public Affairs Division, Mr. Fidel Pepple it was noted that while the Industry concern is normally expected in the process leading to the award of major Oil and Gas Projects, “NNPC has an established procedure of contract and project approval which includes conduct of economic analysis to establish project viability and Federal Government’s take from investments in the upstream’’.
The Corporation explained that this procedure must be followed and IOC’s cannot stampede the Corporation into taking decisions that may be inimical to the nation because of their pecuniary interests.
On the claim that the NNPC has not held its periodic Group Executive Committee meetings to discuss some major projects like the TOTAL Egina deep offshore project and endorse same to NNPC Board for approval, the NNPC stated thus:
“This claim is untrue as GEC meetings are being held weekly or fortnightly. However, Erha North Phase 2 and Egina Project contracts have not been discussed yet at these meetings because NNPC Management is critically reviewing the overall economics of the project in view of their high cost estimates in order to establish their validity, maximize Federal Government’s take and ensure comparative price competitiveness vis-a-vis benchmarks.’’
On the allegation that the Group Executive Director, Exploration and Production of the NNPC, Engr. Abiye Membere was behind a phantom contract splitting attempt of the Egina Project just as he allegedly did with the previous Bonga Southwest project, the Corporation stated that such allegation is totally misplaced and untrue.
The NNPC informed that the alleged contract splitting of Bonga Southwest was never in the cards as there was never a time that SNEPCO proposed three Floating Production Storage Production offloading facility (FPSOs) for Bonga Field Development.
“Engr. Membere also did not scuttle Bonga Southwest/Aparo Project six years ago. He was the GM, PSC Division of NAPIMS in 2006 and helped to move forward the strategy for a leased FPSO project for Bonga Southwest /Aparo project. He was deployed from this position to another position in NNPC’s Engineering& Technical Directorate in 2007 during a routine Management re-organization exercise’’.
The Corporation explained that the said Bonga South/Aparo was recycled for concept re-evaluation in 2009 when dearth of bidders were recorded on the major packages at the technical stage and with a potential of only one bidder emerging to the commercial stage of the FPSO tender. “This decision to recycle Bonga was taken by NAPIMS Top Management and not Engr. Membere’.
Also on the report that the NNPC blamed lack of funding as the cause for the alleged lull in the execution of the project, the Corporation described the allegation as untrue and laughable. “This claim is untrue as there is no funding challenge in PSC because operators fund the investment 100 percent’’.
The NNPC Management stated that despite the spate of attacks, it remains focused on its core mandate of ensuring that the Federal Government and the Nigerian people derive maximum benefit from the proceeds of the nation’s hydrocarbon resources.
Some of the IOC’s contacted for their comments on the development declined.
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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.

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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.

 

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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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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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