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Nigeria may lose US$10tr capital investment to pipeline vandalism

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The nefarious activities of pipeline vandals may cause Nigeria to lose about $10 trillion in capital investment globally from 2015 to 2025 in the oil and gas business.
This loss of global investment in the oil and gas business for Nigeria may also lead to its inability to compete regionally, continentally ‎and globally in the oil space. 
 
Reason given is the fact that other African countries have made a swift entry into the oil and gas business while Nigeria’s net exporter of crude (US) has become self sufficient since the discovery of Shale gas. 
 
‎According to www.oilprice.com, Nigeria is ranked above Mexico, Iraq, Russia and Indonesia as the most plagued country by oil theft. 
 
It has been estimated that Nigeria lost between $10-$12 billion‎ to crude oil theft between 2009 and 2011 and $5-$7 billion annually. 
 
According to a study done by Chatham ‎House, it was found that the countries with the most imported stolen oil from Nigeria include the United States, several West African Countries, Brazil, China, Singapore, Thailand, Indonesia and the Balkans. 
 
Reuters also reported that stolen Nigerian crude worth billions of dollars is sold every year on international markets and much of the proceeds are laundered in world financial centres like Britain and the United State. 
 
‎The Managing Director of Energia, Engr. Felix Amieyeotori said crude oil theft is a global problem that hurts the world’s trade since it involves international trade, foreign banks and global companies. 
 
He lamented that his company (Energia) with three other Kwale Cluster Marginal Field Operators lose 25-30 percent of crude injection to theft daily. 
 
“We suffer 10,000 bopd defered production behind pipe due to pipeline vandalisation and crude theft. ‎We lost about $200 million to crude theft in 2012 -2013,” he said. 
Apart from the economic implication of pipeline vandalism, E‎ngr. Felix explained that there are environmental and health consequences.
He stated that about 30 percent of refined oil is recovered during pipeline vandalism but 70 percent of the product is discarded into the environment.
Engr. Felix added that Liquid, solid waste and residues from dumps which are not properly disposed or treated usually cause contamination of domestic water supplies leading to various kinds of health hazards.
He explained that efforts have been put in place to curb the menace ‎of pipeline vandalism.
These efforts according to the Energia boss was put in place by the National Economic Council Committee against crude oil theft consisting of six state governors, members of the state security agencies, the petroleum minister, National Planning and Justice, NNPC officials, NIMASA and all the IOC’s, headed by the Delta State Governor.
“JTF and the Nigerian Navy efforts has led to the destruction of illegal refineries, and arrest of barges, tug boats and tanker; and illegal bunkers.
“Between January-March 2014, crude oil theft was reduce from 2.5 million barrels to 1.25 million barrels as attested by the figures released by Oil Producers Trade Section.
“Efforts mainly is from the navy and the JTF resolve to painstakingly fight this menace to logical conclusion.
 
“The African Caribbean Pacific ‎and European Union, ACP-EU Joint Parliamentary Assembly in its 10th regional meeting in Abuja in July 2013 resolved that crude oil theft could be curbed by applying the same method used in stopping the peddling of stolen diamonds in Europe.
“The Assembly proposed a certification of all oil consignments legally exported by Nigeria to distinguish them from those stolen and ensure that countries do not accept stolen crude oil into refineries any longer.
“Its members would prevail on their home countries to ban the purchase of crude oil whose origin cannot be verified as that would discourage the international cartel of oil thieves and the local collaborators in Nigeria from engaging in illegal oil bunkering,” Engr. Felix stated.
He also mentioned that President Good Ebele Jonathan has set aside one billion US dollars for the implementation of a comprehensive programme to check crude oil theft, vandalism of oil and gas infrastructure and the apprehension and prosecution of crude oil thieves.
Engr. Felix Amieyeotori who spoke at the 2014 National Association of Energy Correspondent annual conference in Lagos said since the hub of illegal refining and illegal oil bunkering is in the creeks, the three tiers of governments should engage all the communities and settlements in these area into a dialogue. 
 
He explained that the dialogue would create a mutually beneficial solution which will include network of security and surveillance, economic empowerment of these communities. 
 
Engr. Felix also suggested that amnesty should be granted illegal refiners in order to train them in crude refining technologies, setting up of modular refineries or engaging them in existing refineries. 
 
He further suggested that securities forces like the navy and JTF should be equipped with modern surveillance vessels and gazettes to effectively patrol the creeks to fight and stamp out illegal bunkering business. 
 
The Energia boss also stated that Nigeria Extractive International Transparency Industries, NEITI, Department of Petroleum Resources, DPR, NNPC and oil companies should work closely to ensure proper hydrocarbon accounting.  
 
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Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

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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.

 

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Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

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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.

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Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

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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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