Oil
Heritage Oil to expand Nigeria portfolio
LAGOS – United Kingdom-listed Heritage Oil has said it plans to “expand” its portfolio in Nigeria after last year’s acquisition of stake in a string of Nigerian oil field assets.
The company last year acquired a stake in Oil Mining Lease 30, originally owned by Shell Petroleum Development Company of Nigeria, SPDC, in a $850 million deal.
Biztellers reports that production from the asset has averaged 20,000 barrels of oil per day, bpd, since the acquisition, lower than the 36,000 bpd level recorded last November and way off the 58,000 bpd level production target Heritage has for the end of the year.
“We are looking to expand the footprint in Nigeria without question. We are in discussions with parties,” Reuters quoted Chief financial officer Paul Atherton to have said in an interview.
The company, which made its name with big oil finds in Uganda that it has now also sold, is under pressure to almost triple production at the Nigerian field, named OML 30, by the end of the year after strikes affected its performance to date.
The Niger Delta, heartland of Africa’s biggest oil and gas industry, is prone to bouts of unrest by militant factions and widespread oil theft to date this year has caused the country’s oil production to fall well below expectations.
Heritage’s strategy in Nigeria is to raise production at fields like OML 30, though too small to be significant to companies like Shell, by investing in equipment and drilling, and improving community relations.
Calling OML’s output since the acquisition “varied”, Atherton said the year end production goal was unchanged, but conceded there were teething troubles. “It’s a new group, a new operator, obviously people have to get their feet under the desk,” Atherton said.
Meanwhile, shares in the company dipped 2.5 per cent in mid-morning, paring earlier losses of as much as five percent, which analysts attributed to what they saw as a lower than expected production figure.
Production, which has gone as high as 43,000 bpd since Heritage’s acquisition in November, has suffered due to the strike by local workers as well as a pumping system failure, the newswire observed.
Royal Bank of Canada analyst Al Stanton said the production figures raised questions over Heritage’s ability to influence operations at OML 30, where the company through its Nigerian unit is junior partner to state-run Nigeria National Petroleum Corporation.
Atherton said production would improve due to a ramp up in maintenance and the installation of new pumps, plus the positive impact of the social programmes which the company is putting in place in local communities.
Heritage, founded by a former North Sea diver, Tony Buckingham, who went on to provide mercenary fighters in Africa when he was a partner in the military contracting firm Executive Outcomes, formed a joint venture with Nigeria-based Shoreline with the aim of taking advantage of Nigeria’s plan to indigenise its oil industry.
“We’ve stated our intention is to be one of the leading indigenous oil companies (in Nigeria) so we are looking at some very large transactions,” said Atherton, adding that the company was also considering acquisitions elsewhere in Africa.
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.
Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones
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.”
Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy
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.
Edo: Gov Okpebholo Launches Probe Into Obaseki Administration
PDP Governors Probe Ondo Polls, Criticizes Edo Result
NDLEA Nabs Businessman For Using Ingestion To Smuggle Cocaine
Entertainment Made Africa Look Good Despite Bad Leaders — Davido
NECO Expands Global Footprints, Accredits Niger, Equatorial Guinea Schools
Harry Kane Hits Back At Critics With Historic Hat-Trick For Bayern Munich
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Oando opens ultra-modern petrol station in Lagos
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
