Oil
NNPC to invest USD 5.2 billion on acquired IOC assets
…increases oil output to 160,000 bpd by year end 2014
ABUJA – In an effort to significantly increase its production output the Nigerian National Petroleum Corporation (NNPC) through its subsidiary the Nigerian Petroleum Development Company, NPDC, has concluded plans invest about 5.2 billion US dollars on its oil assets acquired from International Oil Companies (IOC’s) over the next four years.
The company is also planning to increase its output on oil Mining Lease, OML 42 by an additional 30,000 bpd, while also working to grow its total production output to a total of 160,000 bopd.
The plan to be realised in the coming years is expected to increase the total output of the OML from the present 30,500 bpd to over 60,000bpd.
The NPDC, a subsidiary of the Nigerian National Petroleum Corporation, NNPC took over the operatorship of OML 42 assets from SPDC (Shell) in January 2012 when the station was producing 25,500 barrels per day, bpd from 11 strings.
The firm which made this known in a recent presentation stated, “Six months after successful takeover of operatorship, NPDC raised the production level to 30,500 bpd (13,800bpd net) from 13 strings. This milestone production was unprecedented in the history of Batan production even when SPDC was operating.
NPDC stated that the key achievements on OML 42 since the takeover of operatorship included the accomplishment of a zero lost time incidence.
It stated that the milestones included concluded engagements with the host communities in OML 42 for Freedom to Operate (FTO) and another engagement of operations and maintenance contractor for Batan flow station.
The firm stated that they also included putting in place over 40 service contracts for the sustenance of Batan Flow station operations and the SPDC contract for the rehabilitation of Oil and Gas Facilities and Installation of Power generation facilities at Odidi Node by Lee Engineering and Construction Company.
It stated the repair of Ajuju 1S flowline to secure about 1,200bopd crude oil production, repair of Ajuju 6T flowline to secure about 1500bpd crude oil production and sustained Batan Flowstation production at about 30,500blpd (13,800bpd) from 13 strings.
The firm also listed the hook up of Batan Flowstation Houseboat to the flowstation Gas Generator to reduce diesel consumption by 500litres per day as its another accomplishment.
It stated, “The next phase will be opportunity maturation through the commencement of Odidi and Jones creek Re-entry Projects.
The firm stated, “These projects have several modules in phases with Phase 1 geared towards additional 30,000 bpd and 45mmscfd gas from Odidi field and about 48,000bpd production increase from Jones creek.”
The investment is said to be part of a $5.2 billion, four-year investment plan aimed at raising oil production to 300,000 b/d mainly from assets acquired from foreign oil companies including Shell.
The Managing Director Mr. Victor Briggs stated, “The investment plan will kick off with capital expenditure of $1.8 billion this year, which we expect will increase production from 140,000 barrels per day now to 160,000 b/d by end of this year, and to deliver 600,000 Mcf/d of gas by year-end.
NPDC has bolstered its production and increased reserves to around 2.1 billion barrels after taking over operatorship of six onshore oil wells sold off by Shell, Total and Eni, including OML 30, which recorded output of 35,700 b/d at the end of last year.
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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