Oil
Oil revenue drops by N189bn
ABUJA – Revenue accruable to the Federal Government from crude oil exports dipped by N188.5 billion to N457.2 billion in August 2013, compared to N645.7 billion recorded in July.
According to data obtained from the Central Bank of Nigeria, CBN, in its Economic Report for August 2013, the amount received by the government from crude oil in August, is the lowest since the beginning of 2013 and the lowest in a one-year period.
Specifically, crude oil revenue in January 2013 stood at N591.4 billion, rising to N647.6 billion in February, before dropping to N595.3 billion in March.
Thereafter, it was ups and downs, as the figures rose again in April to N613.4 billion; N641 billion in May, dropping again to N559.4 in June, rose again in July to N645.7 billion, before dropping its lowest to N457.2 billion in August.
This contrasts sharply with earnings of N749.1 billion year-on-year to August 2012, the highest over a 12-month period.
A further look at the CBN Report on the gross revenues in August 2013, revealed that that the Federal Government received N129 billion, from the sales of crude oil and Gas, which dropped by N44.1 billion from N173.1 billion recorded in July.
Revenue accruable to the Federal Government from domestic oil and gas sales stood at N109.3 billion, dropping by N4.5 billion from N113.8 billion in the preceding month, while Petroleum Profit Tax/Royalties dropped by N140 billion, from N358.6 billion recorded in July to N218.6 billion as at August.
The CBN attributed the decline in crude oil revenue relative to the preceding month to the shortfall in receipts from exports and other oil revenue during the period in review.
IMF, experts’ observations
In its World Economic Outlook for October 2013, the International Monetary Fund, IMF, said Nigeria’s economy and those of other countries without sufficient buffers would be negatively affected by a sharp or protracted decline in oil and commodity prices.
The IMF further stated that the decline will likely affect planned or ongoing resource development projects in the country.
Also commenting on the outlook of Nigerian economy for the rest of the year, the Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, warned that Nigeria’s economy growth is under threat, especially in the face of volatile global oil prices and the declining trend in Nigeria’s crude receipts.
Oil production
The CBN noted that Nigeria’s crude oil production, including condensates and natural gas liquids, was estimated at an average of 1.88 million barrels per day (mbd) or 58.28 million barrels for the month.
It stated that this was 0.03 mbd or 1.6 per cent higher than the 1.85 mbd or 57.35 million barrels produced in the preceding month.
The improvement the CBN noted was due to the successful arrests and constant clampdown of crude pipelines vandals, adding however, that crude oil theft in the Niger Delta region continued to impact negatively on oil output.
The CBN report further stated that oil export was estimated at 1.43 mbd or 44.33 million barrels, representing an increase of 2.1 per cent, compared with 1.40 mbd or 43.4 million barrels recorded in the preceding month.
It said deliveries to the refineries for domestic consumption stood at 0.45 mbd or 13.95 million barrels during the review month.
– VANGUARD
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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