Oil
Exxon Mobil Signs Iraq Deal With PetroChina, Pertamina
LONDON – U.S. energy giant Exxon Mobil Corp. said Thursday it agreed to sell stakes in its West Qurna-1 oil project in Iraq to PetroChina Co. and PT Pertamina (Persero) of Indonesia.
The project involves a service contract with the government to develop an oil field.
Exxon said PetroChina would take a 25% stake in the project and Pertamina would take a 10% stake. The West Qurna-1 field is located near Basra in southern Iraq. It is one of several big fields that Western oil majors agreed in 2010 to help Iraq develop.
After selling the 25% and 10% stakes, Exxon will retain 25% of the field and continue as its operator. The remaining stake is owned by Royal Dutch Shell PLC and Iraq’s state-owned South Oil Co.
For PetroChina, the deal with Exxon is a further indication of China’s appetite for Iraqi crude. China has quickly emerged as a key buyer of Iraqi crude, having more than doubled its imports from Iraq since 2009, according to Chinese customs data.
Simon Powell, head of Asian oil-and-gas research at CLSA Asia-Pacific Markets, said the deal could be worth up to $5 billion based on its reserves and a contract of at least 10 years.
Earlier this year, Exxon gave Baghdad formal notice that it wanted to sell less than half of its stake in the field to PetroChina. The decision came after tension between Exxon and Baghdad over Exxon’s decision in 2011 to help the semiautonomous region of Kurdistan explore and develop its own oil wealth. Baghdad has warned Exxon to choose between its deal in the south and the one in Kurdistan, though more recently Iraq has ratcheted down the rhetoric over the Kurdistan project.
The West Qurna-1 field has the potential to produce nearly three million barrels of crude a day, by some estimates, rivaling some of the world’s largest fields. Exxon and Shell are spearheading the $50 billion project, which currently produces 510,000 barrels a day.
Chinese oil companies have been on a global shopping spree in recent years to meet the country’s energy needs while domestic oil output has been slowing in the past decade as its fields mature. PetroChina said it aims for overseas production to account for half of its business by 2015.
Since 2009, PetroChina and its parent, state-owned China National Petroleum Corp., have spent $37 billion in buying overseas oil-and-gas assets, according to data provider Dealogic.
Growing activity for PetroChina and CNPC in Iraq reflects China’s willingness to pick up assets in higher-risk locales. Concerns over CNPC and other Chinese oil companies’ ties to the Chinese government have limited their ability to secure new and unconventional oil-and-gas resources coming online in North America.
– WALL STREET JOURNAL
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.