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Crude Oil Swap Deal: Nigeria lost ‎$966m in four yrs

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…..spent N4trillion on subsidy in seven years
 
By Kunle Kalejaye 
ABUJA-BETWEEN 2009 and 2012, the Federal Government of Nigeria lost the sum of $966 million as revenue from the crude oil swap deal, according to ‎reports from Nigeria Extractive Industries Transparency Initiative, NEITI.
Crude oil Swap is an arrangement by the Federal Government under the supervision of Nigeria National Petroleum Corporation, NNPC ‎to trade the nation crude oil in exchange for refine products.
Oil vessels

Oil vessels

NEITI’s Director of  Communication Mr. Orji Ogbonnaya Orji who spoke in a one day forum on subsidy organised by Media for Oil Reform in collaboration with Pan Atlantic University, School of Media Communication, said there has been public concerns that the objective of this arrangements has been compromised and abused stating that between 2009 – 2011, there was a revenue lose of $866 million

Mr. Orji explained that in 2012 alone , the cost of crude oil swapped was $6.4 billion while value of refined products returned to Nigeria was $6.3 billion leaving the sum of $100 million as revenue loss to the Federation.
‎He maintained that similar concerns were raised with subsidy payment noting that NEITI’s audit reports disclosed the total sum of N4 trillion as oil subsidy payments between 2006-2012.
‎He said in  2006,  N219.72 billion was spent on subsidy, in2007 – N236.64 billion; 2008 – N360.18 billion; 2009 – N198.110 billion; 2010 – N416.45 billion; 2011 – N1.9 trillion; and in‎ 2012 – 690 billion.
“The subsidy payments in 2012, N690 billion when compare to  N1.9 trillion paid in 2011 shows a 29% reduction. This reduction may be due to the January 2012 national protest against oil subsidy, Mr. Orji said.
NEITI scribe ‎said the transparency initiative audit also revealed that NNPC had claimed that a total sum of N1.7 trillion was paid as subsidy between 2006-2012.
‎”NNPC deducted these sum directly from domestic crude oil proceeds before remitting the balance to the Federation account.
“Subsidy deductions by NNPC increased by 110% from 198 billion in 2009 to N416 billion in 2010, and 89% in 2011 (N416 billion to N786 billion 89%).
¡The increase between 2009 and 2011 alone  was 186% from N198 billion to N786 billion,” Mr. Orji stated.
‎He stressed that government  need to conduct an in-depth  investigation into the management of subsidy payments; ensure NNPC follows due process in the PSF scheme; deregulate the downstream sector; ensure refineries work to their full capacity; build new refineries; and gradually phase out oil subsidy.

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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