Oil
Alison-Madueke seeks diversification of Oil Revenue Base
…As NPDC grows Crude Production to 205, 007 bpd
ABUJA-The Minister of Petroleum Resources, Mrs. Diezani
Alison-Madueke has declared that the Ministry and its
parastatals are focused on mitigating the effects of lower
crude oil prices by directing efforts and investments
towards the diversification of oil revenue base in 2015 and
beyond.
Speaking at the 2014 budget performance and 2015 budget
defence presentation before the House of Representatives
Joint Committee on Petroleum Resources-Upstream, Downstream
and Gas Resources, Mrs. Alison-Madueke stated that the
ministry will expand its revenue frontiers by enhancing gas
operations, expanding retail outlets and increasing
refineries’ capacity utilization while at the same time
minimizing the losses.
The Petroleum Minister noted that the year 2014 was packed
with several industry activities, the most apparent
being the upsurge in divestment and acquisition transactions
that are boosting the number of Nigerian upstream
operations.
‘’However, the petroleum ministry still faced a number
of challenges, such as pipeline vandalism, crude oil theft,
declining crude oil prices, inadequate funding.
Notwithstanding, with all hands on deck and the support of
the National Assembly, the industry performed well in
2014,’’ Mrs. Alison-Madueke said.
The minister listed some of the achievements of the industry
in 2014 to include: the increase in
In the production capacity of the National Petroleum
development Company, NPDC from 130, 000 barrels per day to
205, 007 bpd, the sustenance of crude oil production at an
average of over 2.24million barrels per day in spite of all
the attendant challenges of crude oil theft and pipeline
vandalism, growing of NPDC into a mid-size Exploration and
Production Company and major gas supplier to the domestic
market with over 600 Million Standard Cubic Feet of gas per
day supplied through Oredo, Ughelli and Utorogu gas plant.
Also listed as achievements within the period are; the
enhancement of gas infrastructure through the addition of
new Central Processing Facilities along critical gas
pipelines, restructuring of the upstream gas sector by
increasing the delivery price and transmission of gas with a
view to boosting investment in the sector, collaboration
with the Central Bank of Nigeria, CBN to settle outstanding
indebtedness of the Power Sector to upstream gas suppliers
in order to ensure continuity of supply, boosting of gas
supply to power with current ability to support 5, 800 MW of
generating capacity with all completed power plants
connected to permanent gas supply lines as well as the
attainment of an average Gas Production of over 8.6 billion
cubic feet of gas per day and over 7.6 bcfd utilization at
the end of 2014.
The Petroleum minister said that in 2014 the ministry
through the Nigerian National Petroleum Corporation
commenced the critical expansion and construction of major
backbone infrastructure which led to the expansion of
Escravos –Lagos pipeline to 2 billion cubic feet per day
capacity, the East-West OB3 Pipeline as well as the
Calabar-Ajaokuta-Kano Pipeline utilizing Eurobonds and IFC
Funding.
“ within the period we embarked on aggressive Gas
infrastructure delivery which resulted in the completion of
over 450km of gas pipeline, additional 377km pipeline
construction is ongoing plus another 1, 400km at
developmental stages expected to commence in 2015, ’’
she said.
In the downstream sub-sector, NNPC Retail increased
operational stations from 432 in 2013 to 496 in 2014 while
stability in the supply and distribution of petroleum
products was achieved within the period. “After many years of being inoperable due to pipeline
vandalism, we have upgraded many of the our pipelines and
products Marketing Depots across the nation, namely: Port
Harcourt-Aba product; Warri-Benin; Kaduna-Gusau;
Suleja-Minna; Kaduna-Jos, Jos-Gombe, only last week, the Aba
Enugu pipeline. All these depots are now fully operational
and will enhance the stable supply of petroleum products
across the country despite the challenges of
vandalism,’’ she said.
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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