Oil
Kenya turns to Nigeria for crude oil, gas
NAIROBI – With proposed electricity generating plants that are expected to reduce the overall cost of power and of doing business in the country, Kenya is seeking to buy crude oil and natural gas from Nigeria at concessionary prices to fire up the plants.
Nigeria, in the past few years, has seen significant decline in the imports of its crude oil and gas from the United States, a development that has deepen the need for the African top oil producer to ramp up efforts toward finding new markets.
The East African country was said to have made the request for preferential treatment recently in a deal that could see Nairobi cede oil blocks to Nigeria.
It was part of the discussions between President Uhuru Kenyatta and his Nigerian counterpart, Goodluck Jonathan, during the former’s state visit to Abuja this year that saw the two governments sign deals on technology transfer and capacity building in oil- and gas-related skills.
The concessionary crude oil would help Kenya rein in its import bill given that petroleum products are its single largest import item. Fuel imports account for at least a quarter of Kenya’s total imports.
Over the past six years, landing prices for Murban Crude at the Mombasa port have doubled from $62 per barrel to around $113.
Moreover, the growing economy is expected to fuel a steep jump in consumption, with the government estimating that the country will be using six million tonnes annually by 2016, up from the current 4.5 million.
While details of the deal have not been firmed up, the two countries have signed a memorandum of understanding, setting the tone for negotiations that could see Kenya offer vacant oil blocks — with at least six due for auction.
The six blocks due to be auctioned in Kenya fell vacant following the announcement in 2012 of new rules requiring exploration firms to cede 25 percent of their licensed acreage if they failed to work on the sites in the stipulated time. Once auctioned, the blocks will increase Kenya’s exploration areas to 52 from 46.
The biggest challenge in the oil and gas deal would be shipping costs because the crude will have to travel from West Africa to Cape Town before landing at the Kenya coast, Mwendia Nyagah, a Nairobi-based petroleum expert, was quoted to have said.
The Nigeria deal is crucial to Kenya’s plans to build a 700MW natural gas-fired power plant in 30 months as part of an ambitious plan to add an estimated 5,000MW of capacity — triple the current capacity — over the next three years.
General Electric is also involved in several investments in the power sector that could add about 1,000 megawatts (MW) to the Kenyan grid over the next five years.
– BUSINESS DAY
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.