Oil
BP, Shell Urge Scotland to Vote against Independence
A week to go before the Scottish independence referendum, BP plc and Royal Dutch Shell plc have both come out in support of comments by Scottish oil tycoon Sir Ian Wood that Scotland’s voters are being misled by the pro-independence campaign’s unrealistic predictions of future oil revenues.
Speaking to the press in Edinburgh Wednesday, Wood warned that a slowdown in production means that North Sea revenues will not exist in 30 years. Wood had previously stated, in late August, that there would be consequences for the oil and gas sector if Scotland were to go independent and that there would be just 15 years before the depletion of North Sea oil reserves began to hit the Scottish economy.
Wood was also highly critical of figures recently produced by N-56 – a Scottish business organization with connections to the Yes Scotland campaign – that stated an additional 21 billion barrels of oil equivalent is potentially recoverable from the North Sea from unconventional shale resources.
“Frankly that’s an insult to the intelligence of the Scottish people,” he said. “First of all, if it was true a whole lot of oil and gas companies would be doing it right now, but there’s one very small company looking at what can be done. Secondly you cannot economically exploit shale offshore. You need a huge number of wells, which are very expensive and that’s not going to work. You might manage to drill into some of the rock offshore and exploit that, but no-one’s done that so far.”
Later on Wednesday, BP and Shell both issued separate statements supporting Wood.
BP Group Chief Executive Bob Dudley commented:
“BP has been in the UK North Sea for 50 years and we hope to operate here for many years to come. However, the province is now mature and I believe Sir Ian Wood correctly assesses its future potential.
“The opportunities today are smaller and more challenging to develop than in the past. We also face the challenges of extending the productive life of existing assets and managing the future costs of decommissioning. Much of this activity requires fiscal support to be economic, and future long-term investments require fiscal stability and certainty.
“Our business invests for decades into the future. It is important our plans are based on a realistic view of the North Sea’s future potential and the challenges the industry faces in continuing to operate here.
“As a major investor in Scotland – now and into the future – BP believes that the future prospects for the North Sea are best served by maintaining the existing capacity and integrity of the United Kingdom.”
Shell CEO Ben van Beurden added:
“Sir Ian Wood is right in his technical assessment that the amount of remaining oil and gas that can be profitably extracted from the UK North Sea is a function of price and cost. As existing infrastructure gets older and output falls, costs will go up and tax receipts will come down. Furthermore, much of the UK North Sea’s remaining oil and gas – which is yet to be discovered and developed – is in isolated or hard-to-reach areas, which are potentially uneconomic without sharing of existing infrastructure and improved tax incentives.”
Meanwhile, the Scottish National Party also issued a statement mid-week welcoming a new paper from Professor Alex Kemp of the University of Aberdeen in which he predicts 99 new oil discoveries over the next 30 years that will be commercially viable as well as a further 57 that will be uneconomic but could become viable as a result of technological improvements and a higher oil price.
Commenting on the research, Scottish Energy Minister Fergus Ewing said: “Professor Alex Kemp is one of the world’s leading oil economists, wrote the official history of North Sea oil and has detailed modelling on the future of Scotland’s oil and gas industry. His new predictions – based on that modelling – show a bright future for Scotland’s oil and gas sector for decades to come.”
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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