Oil
Oil Price drop: NAPE Urges FG to increase exploration activities
…wants the removal of Petroleum Minister as Chairman NNPC board
By Yemie ADEOYE
ABUJA-THE Nigerian Association of Petroleum Explorationists, NAPE, have advised the Muhammadu Buhari led federal Government to take advantage of the abysmally low crude oil prices and increase exploration activities and opportunities in the country.
This is coming on the heels of the Associations recommendation to the federal government to intensify the ongoing reforms at the Nigerian National Petroleum Corporation, NNPC, and ensure that the Minister for Petroleum Resources ceases to be the Chairman of NNPC board.
This position was put forward by the President of the NAPE, Mr Chikwendu Edozien during a media parley on the forthcoming annual NAPE international conference In Lagos.
Specifically, the Association wants the federal government to encourage exploration activities in the country during the period of low crude oil prices as the low prices has brought about lull in exploratory activities which has in turn brought about low activities for oil rigs and other exploration equipment. This, according to him is an opportunity the country should consider at this time and take advantage of so the lull in the industry today would no longer be there.
“The costs of hiring equipment’s have gone down because no one is hiring those rigs and equipment due to low oil prices and the glut in the global oil sector.
Now we must understand that the crude oil price may not bounce back immediately, and exploratory activities are also time consuming. If we use the opportunity of low equipment prices to hire these equipment’s now and commence exploration activities, thereby bringing life back into the sector it will take another 4 to 5 years to probably be ready for first oil, and by that time It is very possible that crude oil prices would have bounced back.”
While defending is Associations position on the Chairman of the NNPC Board, Mr. Edozien stated that the position of the Minister of Petroleum Resources as NNPC Board Chairman would make nonsense of the serious-minded reforms currently ongoing in the corporation as NNPC needs to be distanced from politics if the corporation must become commercially viable and ready compete.
He noted that the Minister of Finance is never the Chairman of CBN board, and that has allowed the CBN function professionally without undue political interference and that is that should be done to the NNPC.
The association also condemned the procurement and contracting cycle in the Nigerian oil and gas industry, which is said to be no less than 36 months thereby making it the longest and most inefficient in the world.
“The long contracting cycle results in high levels of uncertainties in costing and planning thereby creating a sluggish business climate.”
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.