Oil
FG Backs Oil Industry on Shale Gas, Reform
…as GMD laments incessant attacks on NNPC, says Nigeria unfair to the Corporation
ABUJA – The Federal Government earlier today (Thursday) pledged to support the Nigerian Oil and Gas industry in its quest to square up against daunting global industry challenges and compete for relevance in the international energy space.
Speaking at the 2014 Oloibiri Lecture Series and Energy Forum organized by the Nigerian Council of the Society of Petroleum Engineers, the Vice President, Arch.Mohammed Namadi Sambo said that with the changing global demand and supply balance, the industry must begin to expand and grow processing capacity for local utilization as well as export of finished products.
The Vice President who was represented by the Group Managing Director of the NNPC, Engr. Andrew Yakubu noted that the Government is ready to support the industry to join the shale gas revolution in the next decade.
“I have no doubt that we have the required capacity and competence to tackle these challenges. Government has been and is ready and willing to support your effort in this direction. There is no doubt that oil and gas have played a big role in the economic development and transformation of our country over the last half century,’’ he said.
Arch. Sambo stated that oil and gas has enabled the building of infrastructure as well as aided in the development of other sectors of the economy and national life.
“We must therefore continue to maintain focus in doing the right things to transform the industry as to meet the new challenges of the next century,’’ he said.
Fielding questions from members of the audience in the course of his presentation, Engr. Yakubu lamented the spate of negative criticism and public misconceptions of the operations of the NNPC. He noted that such comments were not only unfair to the Corporation but come as a morale dampener to the thousands of staff in the NNPC who toil day and night to ensure that the country reaps bountifully from proceeds of its hydrocarbon resources.
In her presentation, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke represented by Engr. Abiye Membere, Group Executive Director, Exploration and Production of the NNPC, acknowledged the growing level of indigenous participation in mainstream exploration and production of the oil and gas business in the country.
The Minister stated that from a little over one percent some few years back Nigerian companies now account for 10 percent of total daily crude production of 2.3 million barrels with a projected rise to 30 percent by the year 2020.
Also responding to questions on the purported stringent fiscal regime in the Petroleum Industry Bill currently before the National Assembly for legislative action, Engr. Membere cautioned the International Oil Companies against undue criticism of the bill and called on them to come forward with their numbers for proper debate .
“In 1993 under the existing Production Sharing Contracts, Royalty was zero. The question now is, do the IOCs still want royalty to remain zero in 2014? We cannot as a nation have zero royalty in the eight most prolific oil and gas assets,’’ Engr. Membere argued.
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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