Oil
IEA Says Iran Oil Exports Rising But Challenges Abound
LONDON — Iran’s oil exports are already rebounding after an interim deal with the West but the Islamic Republic won’t flood markets even if international sanctions are lifted, the International Energy Agency said Wednesday.
The IEA, the top energy watchdog, said global oil demand will be higher than expected next year and that could push up oil prices amid persistent production disruptions.
In its closely watched monthly oil market report, the IEA said preliminary estimates indicate that receipts of Iran’s crude oil and condensate exports rose by 89,000 barrels a day in November, to 850,000 barrels a day as the Chinese bought more and shipments to Taiwan resumed.
By contrast, the agency had said last month that Iran’s crude exports had reached their lowest level in 21 months in October.
The Iranian oil export rebound comes as, on Nov. 24, Iran and six world powers agreed to a partial easing on international restrictions in exchange for Tehran scaling down its nuclear program.
The shipments would have been arranged before the sanctions relief agreement suggesting the situation of the country’s embattled oil industry is already improving.
Tanker data show Iran withdrew 15 million barrels out of its bloated floating storage while its production rose by 13,000 barrels a day to 2.71 million barrels a day in the past two months, the IEA said.
While capping Iranian crude oil exports to 1 million barrels, the nuclear pact allows the resumption of insurance on Iranian oil voyages—thus removing what had been a key impediment to Tehran’s crude exports.
“The lifting of insurance restrictions does not open the floodgates for Iran oil exports,” the agency said. But restrictions on Iranian sales to Asia and a blanket European Union oil embargo “remain fully in place [which] leaves on the face of it no room for any sustained increase in exports.”
The agency said that, even if all sanctions on Iranian oil were eventually relaxed, the country would need sizable investment to boost production and would still face competition in a market crowded with Iraqi and U.S. barrels.
“Meaningful increases in production would require a longer period and additional investment in Iran’s upstream, and thus would take time to materialize,” the IEA said. Making room for Iran could also “be a challenge for other producers, especially in the face of rising non-OPEC supplies.”
Iraq has said it would keep on boosting production, which now stands at 3 million barrels a day–its highest sustained level in at least 20 years. Meanwhile, the IEA said that, in November, non-OPEC crude output topped 43 million barrels a day for the first time in decades largely due to a U.S. shale boom. Total non-OPEC production is now forecast to rise by 1.7 million barrels a day for 2014, it said.
This increase in supply would be absorbed by higher-than-expected global oil demand that the IEA raised by 130,000 barrels a day for this year and 240,000 barrels a day in 2014 due to a colder winter than initially forecast and more robust economic growth.
– WALL STREET JOURNAL
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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