Oil
Nigeria Senate disagree over $76.5 oil benchmark
ABUJA – Even though the Senate had adopted $76.5 crude oil benchmark for 2014 budget as recommended by the joint committee of the Senate and House of Representatives on Appropriation and Finance, some senators are not readily disposed to this decision.
Investigations showed that some of the senators believe that the executive has no justifiable reason to bring down the benchmark from its current state in anticipation of a possible fall in global crude oil prices.
Some senators, who spoke with THISDAY yesterday, argued that $76.5 crude oil benchmark in 2014 was too low when compared with the current $108 global price of crude oil.
According to them, nothing suggests any possible fall in the global price of crude oil in 2014 moreso that the price has been stable in the international market in the past three years.
Further, they argued that if the crude oil price is pegged at $76.5 per barrel, the executive would not at the end of the year account for the remaining gains as they noted that the recent drop of the sum in Excess Crude Account (ECA) from $9 billion to $4 billion was another testimony of inefficient use of excess crude savings.
They argued that a situation where Excess Crude Account becomes regularly depleted despite benching the oil price at a lower rate shows that such decision does not produce desired results.
Some senators also told THISDAY that their support for the adoption of $76.5 benchmark recommended by the Joint National Assembly Committee on Appropriation and Finance did not necessarily mean that they were convinced that it is the appropriate decision but rather because of fears that doing otherwise “would rock the boat.”
According to a senator, the Senate always supports issues that emanate from the Presidency because senators do not want to be marked as the president’s enemies. He commended the House of Representatives which he said possessed the nerve to oppose some executive decisions and defy the consequences.
One of the senators who believe that government’s search for $76.5 dollar benchmark is not justifiable and did not mince words to say so is Senator Femi Lanlehin (Oyo South).
Lanlehin who admitted that he was bound by Senate decision on the benchmark, hailed the courage of members of the House of Representatives to insist on $79 benchmark.
He said the House was taking the bold lead because members are more vibrant because they are much younger than senators most of whom he said were either almost six years of age or more older.
But Senator Smart Adeyemi (Kogi West), who said though the House might not be totally wrong with its adoption of $79 benchmark, added that both chambers only looked at the issue from different perspectives but assured that they would eventually strike a balance in a matter of days.
According to him, the executive is driving for $76.5 benchmark because nobody could guarantee the stability of the oil sector adding that they all meant well for the country since the overall pursuit is to ensure the funding of infrastructural facilities, create enabling environment, improve the well being of Nigerians and galvanising industrial growth.
– THIS DAY
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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