Oil
Nigerian agencies seek $11.5bn spill payout
ABUJA – Two Nigerian government agencies told a parliamentary hearing on Thursday that Royal Dutch Shell should pay a total of $11.5 billion in compensation for damage caused by an oil spill at its offshore Bonga field in December 2011, according to a report.
Shell has said that there is no legal basis for the proposed fines and the Nigerian government has never publicly charged foreign oil companies large sums for oil spills, Reuters reported.
The national assembly can recommend fines the government should impose on oil companies but it has no power to enforce them.
The National Oil Spill Detection and Response Agency (NOSDRA) told the national assembly Shell should pay $5 billion as a fine for environmental damage caused from a 40,000 barrel spill on 20 December 2011 at the Bonga offshore rig.
The Nigerian Maritime Administration and Safety Agency (NIMASA) sought $6.5 billion as compensation for 100 communities it says were affected onshore by the oil spill, which was one of the biggest in the history of Africa’s largest energy industry.
Shell has taken responsibility for the Bonga offshore oil spill but says onshore damage was the result of a different spill a few days later that was not its fault. It said it has cleaned up areas affected by both spills.
“We are going to do post-impact assessment to determine the effect on the environment. By May the contractor would get to the site and by the third quarter of the year the job would be concluded,” Chike Onyejekwe, managing director of Shell’s offshore Nigeria unit told lawmakers.
“We cannot do or say anything now until we do the post-impact assessment study. We have received over 300 letters of claims and we are replying to them.”
The national assembly told Shell to submit its clean-up plans and assessments to lawmakers next week when a date for a future hearing would be set.
NOSDRA and NIMASA are asking Shell for compensation which would equate to around $287,500 per barrel for the 40,000 barrel Bonga spill.
In comparison, BP has total provisions of $42.2 billion for compensation for the 4 million barrels spilled in the spill in the Gulf of Mexico in 2010, which amounts to around $10,550 per barrel.
Hundreds of thousands of barrels of oil are spilled in the mangrove creeks onshore Nigeria every year, destroying the environment and livelihoods.
Many are caused by sabotage or oil theft, but a United Nations report in 2011 said oil firms don’t do enough to clean up spills and maintenance of infrastructure was inadequate.
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.