Oil
Oil theft: NNPC contradicts self, puts daily production at 2.4 Mbpd
…Disputes Shell’s $700Million Q2, 2013 Loss Claim
ABUJA – The Management of the Nigerian National Petroleum Corporation, NNPC, on Tuesday declared that the effort by the Federal Government through the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, to stem the tide of oil theft and pipeline vandalism is yielding positive result contrary to insinuation in some section of the media that the oil and gas industry is headed for extinction as a result of crude oil theft.
This however contradicts the statement of the Group Executive Director Exploration and Production Mr. Abiye Membere at Abonema in Rivers state a few weeks ago where he told newsmen that Nigeria has been struggling to produce between 2.0 and 2.1mbpd since the beginning of the year even though there is the capacity to produce 2.5mbpd.
However, In a press release signed by NNPC’s, Tumini Green, the Corporation stated that the combined efforts by the Petroleum Minister, the NNPC and the IOCs to stem the menace have resulted in a significant drop in the level of pipeline vandalism and crude oil theft resulting in a corresponding increase in daily crude oil production.
“Suffice it to say, some vandalized pipelines and flow stations have been repaired and re-opened such that average current national daily production stands at 2.4mbpd compared to the average year to date figure of 2.13Mbopd as at June 2013,” Green sated.
The NNPC spokesperson traced the current success to the directive by the Honourable Minister to the NNPC to constitute an industry-wide committee on ‘Security Strategy against Crude Oil and Product Theft’. She informed that the committee’s members include representatives from NNPC, all IOC’s, NPDC, Security Agencies as well as the Oil Producers Trade Section (OPTS) of the Lagos Chambers of Commerce and Industry (LCCI).
“In a fortnight, repair works on the Nembe Creek Trunk Line (NCTL) which has a daily capacity of 150,000bopd is expected to be fully completed. On completion, daily average crude oil production is expected to increase to 2.50Mbopd which will exceed the national daily target of 2.48mbpd,’’ she said.
While thanking the security agencies for a wonderful work done to reduce the menace of vandalism, Green stated that the Corporation is determined to sustain this tempo.
“Our expectation is to increase production from the 2.48 to 2.55mbpd (both crude and condensate) for the rest of the year. We have the capacity and potential to maintain production above 2.55mbpd in the country. All that is required is to continue the fight against pipeline vandalism and crude oil theft to achieve this target. This will increase our 2013 average production to about 2.34Mbopd if the current fight against pipeline vandalism and crude oil theft is sustained,’’ she stated.
On the claim that the divestment by some multinational oil firms operating in the Niger Delta is due to harsh operating environment and absence of leadership in the oil industry, NNPC described the argument as defective and rooted on weak syllogism.
The Corporation informed that Mergers, Acquisition and Divestments (MAD) is a global portfolio management strategy employed by mostly big Corporations to restructure and reposition companies for better and efficient revenue growth and competition, wondering why anybody could canvass such position when the multinational oil companies themselves, especially Shell, have repeatedly stated that part of the reasons for divestment of its assets was a deliberate measure to encourage and promote indigenous participation in the upstream oil and gas industry.
“Against this backdrop, it is misleading to relate the strategic divestments as due to the absence of leadership in the oil industry. These divestments have in fact increased indigenous participation which will in turn create new job opportunities, reduce capital flight, encourage capacity building and support gas-based industrialization aspirations,’’ Green said.
With regard to claims by Shell that it lost $700Million by the second quarter of 2013 to crude oil theft and other disruptions in Nigeria, NNPC posits that the loss claims are not localized to Nigeria as reported.
“Shell Acquisition of Shale Oil and Gas Assets in North America has also proven not to be good investments and as such programmed for divestment to minimize risk. In order to further buttress the global challenges, Shell’s current tight oil output is 50,000bopd as against an estimated 250,000bopd in the United States. Furthermore, ExxonMobil’s Q2 2013 earnings were down substantially by 57% year-on-year primarily due to prior year gains, Japanese restructuring and divestments,’’ the NNPC spokesperson explained.
The Corporation restated its determination to work with all stakeholders in the oil and gas industry to ensure effective management of the nation’s vast hydrocarbon resource base
– SWEETCRUDE
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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