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Brent holds above $114

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LONDON – Brent crude inched lower on Wednesday, but held close to a nine-month high above $114 per barrel as Sunni insurgents battled government forces for control of Iraq’s biggest refinery.

The 300,000 barrel per day Baiji complex, located 200 kilometres north of Baghdad, has been fought over since last Wednesday with sudden reversals on both sides.

But a lack of fresh threats to output from Opec’s second largest oil producer curbed prices, Reuters reported.

“Markets have already factored in the Iraq situation – unless something more chaotic happens. The threat of supply disruptions is receding,” the news wire quoted Phillip Futures senior commodities manager Avtar Sandu as saying.

Brent crude for August delivery had fallen 17 cents to $114.29 by Wednesday morning, after gaining 34 cents to close at $114.46 the session before.

US crude climbed 67 cents to $106.70. It hit $107.50 in early Asian trade after federal officials approved exports of condensate, an ultra-light oil, in a marginal relaxation of a 40-year ban on US oil exports.

US crude closed down 14 cents at $106.03 in the previous session.

Officials told energy companies they can export a variety of condensate if it has been minimally refined, a US Commerce Department spokesman confirmed to Reuters, although he said there had been “no change in policy” towards crude oil exports.

The Wall Street Journal reported that the Department of Commerce, which has come under growing pressure to ease restrictions amid a resurgence in domestic production, had given approval via a private ruling to Pioneer Natural Resources Co and Enterprise Product Partners LP to export the so-called condensate.

Expectations of a fall in US crude oil inventories last week also buoyed the price of West Texas Intermediate, CMC Markets chief market strategist Michael McCarthy told Reuters.

Analysts are expecting a fall in US commercial crude oil inventories as refineries boosted output when the US Department of Energy’s Energy Information Administration releases its inventory data for the week ending 20 June later on Wednesday.

Crude oil stocks are forecast to have decreased 1.6 million barrels on average, according to a Reuters poll of analysts on Tuesday.

But the fall in inventories could be larger than expected due to more refining output, McCarthy said and forecast the drawdown could be as high as 3-4 million barrels.

Meanwhile, Opec Secretary General Abdullah al-Badri said on Tuesday that there was no shortage of oil in the market and that the current Brent price is due to market nervousness over Iraq. OECD commercial stocks stood at 57.5 days of forward demand, he added.

Investors are also eyeing the situation in Ukraine after Russia renounced a mandate to send troops into the country and Russian President Vladimir Putin said “a substantive discussion” must follow a seven-day ceasefire to resolve the crisis.

– UPSTREAM ONLINE

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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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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.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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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.

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ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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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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