Oil
Billionaires boost tanker bets on U.S. Fuel
WASHINGTON – Blackstone Group LP, the world’s largest manager of alternative assets, as well as billionaires Wilbur Ross and John Fredriksen are amassing tanker fleets to tap America’s surging fuel exports.
The boom in U.S. energy production is lowering feedstock prices for refineries, allowing them to ramp up exports of petroleum products to destinations including China, Brazil, Venezuela and Nigeria.
Blackstone’s Tactical Opportunities Fund invested “several hundred million dollars” of equity in ship assets in the past two years, its New York-based Principal Jasvinder Khaira said by phone on Oct. 31.
The venture, which acquired stakes in nine tankers hauling gasoline and other fuels last year, is also financing an expansion by Eletson Gas, the second-largest owner of midsize liquefied petroleum gas carriers. Separate Blackstone funds own a company hauling fuel between U.S. ports.
The nation’s highest oil and gas production in more than three decades is enticing investors to ships hauling processed fuels because the U.S. bans most crude exports. Demand for the carriers is accelerating at a time when the most of the maritime industry is slumping. Fredriksen, the richest shipping investor, is building his biggest-ever fleet. Ross, founder of WL Ross & Co., acquired control of an LPG shipper in October 2012, about a year after investing in product tankers.
“They have all seen that shipping has been dragged through the mud,” said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo, whose recommendations returned 24 percent in the past year. “What’s going on in U.S. energy makes companies that can export fuels, gas and even chemicals among the industry’s more attractive investments.”
Oil-product tankers earned $12,825 a day since the start of January, 20 percent more than in 2012 and the most since 2008, according to data from Clarkson Plc, the largest shipbroker. Rates advanced to a record $49,273 in January 2006, spurring a surge in orders for new vessels just before the global recession. Returns fell to $3,491 by April 2009.
Shares of the biggest publicly traded owner of oil-product carriers, Monaco-based Scorpion Tankers Inc., advanced 68 percent to $11.95 in New York this year and will climb 6 percent in the next 12 months, the average of 13 analyst estimates compiled by Bloomberg showed. Only one of 17 analysts whose ratings are tracked by Bloomberg advises selling the stock.
BW Group, the world’s biggest operator of ships hauling liquefied petroleum gas, will sell shares in its LPG shipping unit in Oslo, with trading expected to start around Nov. 25. The Singapore-based firm delisted from the same exchange about 4 1/2 years earlier.
The per-metric-ton charter cost for ships hauling LPGs such as propane and butane averaged $59.15 since the start of January, heading for the best year on record, according to the Baltic Exchange in London. The gases are used for everything from making petrochemicals to cooking.
American seaborne oil-product exports will advance 4.8 percent to 2.39 million barrels a day this year, the most since at least 2000, Clarkson predicts.
The nation’s shipments to overseas buyers more than doubled in the past five years and now represent 12 percent of global trade in the fuel.
“The sudden boom in U.S. product exports has been very attractive to investors who have a lot of cash to invest and are looking for assets that will give those returns,” said Nikhil Jain, a shipping analyst at Drewry Shipping Consultants in New Delhi. “This is a market that is able to offer much better prospects compared to other markets in shipping.”
– BLOOMBERG
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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