Oil
Iran bares new model for oil contracts
DUBAI -Iran will have a new, attractive investment model for oil contracts by September, its president and oil minister told some of the world’s top oil executives at the World Economic Forum in Davos on Thursday, Jan. 23, as part of its drive to win back Western business.
Iranian President Hassan Rouhani and Oil Minister Bijan Zanganeh said their new administration was keen to open up to Western investments and technology, executives who attended the meeting said. They also stressed the importance of fossil fuel, with global energy demand rising.
“The fact that the president of Iran came to the meeting today… is clearly a sign that Iran wants to open up to international oil companies,” said Paolo Scaroni, chief executive of Italy’s Eni, who was at the meeting.
“It was an impressive presentation,” said one of three further oil executives who were at the meeting and spoke with Reuters on condition of anonymity
“They said they are working on a new model to work with investors and are happy to see us,” he added. “They not only need money but technologies. They are happy to have consultations about how new contracts shall work. They want to decide on the model by September.”
“The message was – look at us, our geological risks are minimal, reserves are huge, come and we will create competitive terms and you will be happy. Your return on investments will be acceptable,” another executive said.
Along with ENI, France’s Total, Britain’s BP , LUKoil, and GazpromNeft from Russia, and several other companies were present.
Royal Dutch/Shell had said its new chief executive Ben van Beurden would not be there.
It was not clear if the meeting, which was held behind closed doors amid tight security, was attended by US oil executives from companies such as Exxon Mobil or Chevron.
Sanctions
Tehran has already said it wants Western oil companies to revive its giant ageing oilfields and develop new oil and gas fields once sanctions are lifted.
“The best way for companies like us to go back to Iran is to follow strictly the sanctions and push both parties to reach an agreement which will lead to the lifting of sanctions one day,” Scaroni said.
“I made it clear some time ago I’m not going back to Iran under old contract terms even if all sanctions are lifted.”
Scaroni was the first Western CEO to meet publicly with Oil Minister Bijan Zanganeh, on the sidelines of a meeting of the Organization of the Petroleum Exporting Countries last month.
The major OPEC producer has started implementing a nuclear deal with world powers, a step towards a broad settlement which could lead to the end of sanctions.
Western sanctions imposed in 2012 on Iran for its nuclear programme have choked Tehran’s oil production – output is down a million barrels per day (bpd) since the start of 2012 to 2.7 million bpd – and lost it billions in oil revenue.
Top Iranian officials say it can raise production to four million bpd within six months of sanctions being lifted. Western experts are more conservative, saying three million to 3.5 million bpd is more likely.
Two executives present at the meeting said that they would certainly look at the new contracts and consider investing.
One said he was having no discussions with Iran at the moment and opportunities were abundant elsewhere.
“I was most impressed with the finance minister of Mexico, also talking to us today, about reforms they make to bring companies to share risks,” he said.
– REUTERS
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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