Oil
Brent falls below $109
NEW YORK – Brent crude fell below $109 a barrel on Wednesday as Libya restarted an oilfield, on track to drop for an eighth session in what would be its longest losing streak in over four years.
Easing worries over possible disruptions to supply from the conflict in Iraq also dragged on prices.
August Brent crude had declined 12 cents to $108.82 a barrel by early Wednesday, down nearly 6% from a nine-month high reached in June.
US crude for August delivery was up 3 cents at $103.43 a barrel, after Tuesday’s settlement marked its longest losing run since December 2009.
The price spread between the two benchmarks is the narrowest in nearly a month.
“Oil prices continued their precipitous fall as supply concerns eased further and a lack of positive economic data gave ammunition for new shorts to enter the market,” ANZ analysts said in a note.
Libya restarted the 340,000 barrels per day El Sharara oilfield after protesters ended a four-month strike, state-run National Oil Corporation (NOC) said on Tuesday, a move that could double its current meager crude output.
The government took over the Ras Lanuf and Es Sider oil ports last week, ending an almost year-long occupation that reduced Libya’s output to less than a quarter of the 1.4 million bpd the Opec member used to pump before protests started last summer.
“Libya will start to produce more and we can expect half a million more (barrels per day of crude) to come out of the state,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
“There’s no reason for the crude price to be up at these levels. After all, economies in Europe and China are slowing.”
Meanwhile, Iraq’s new parliament has brought forward the date of its next session to 13 July, in the face of a militant insurgency that has swept large parts of the country.
Investors are eyeing more data on oil inventories in the US and on China’s trade later this week to take the pulse on oil demand at the world’s two largest consumers.
Lingering weakness in the Chinese economy could prompt Beijing to launch further stimulus measures to shore up growth which could lift its fuel demand.
Data from industry group the American Petroleum Institute on Tuesday showed that US crude inventories fell by 1.7 million barrels in the week to July 4, compared with analyst expectations for a decrease of 2.2 million barrels.
The US Energy Information Administration will release weekly data later on Wednesday.
– UPSTREAM ONLINE
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
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.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
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.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
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.