Oil
Saudi Arabia Exposes OPEC’s Fissures
DUBAI – Saudi Arabia has started OPEC’s difficult year early.
In the same month that the Organization of the Petroleum Exporting Countries, a group of some of the world’s largest oil-producers, said it would keep its output ceiling unchanged, the body’s biggest producer and de facto leader “is done with its role as swing producer.”As The Wall Street Journal’s crack OPEC team reports, Saudi Arabia has essentially promised to steady markets for the past two years. But now, with pressure growing over a possible output cut to steady markets, the Saudis are signaling they are no longer willing to go it alone.
OPEC expects overall demand for its crude to fall in 2014, with burgeoning supply levels from producer nations outside the group including the U.S. shale bonanza. Within the group, Iraqi output is soaring, Libya could potentially ramp up production and there is the potential for sanctions-crimped Iranian crude exports to resume.
For OPEC this raises the uncomfortable specter of lower prices and, as a consequence, unbalanced domestic budgets.
Riyadh sees no reason why it and it alone should have to shoulder the burden of trimming and this week’s apparent withdrawal from its role as swing producer is the clearest sign yet of its deep concern.
This month’s OPEC meeting in Vienna was, on the face of it, a cut-and-dried affair. For reporters, the focus was on Iran more than the collective, as the decision to stand pat on overall production was widely expected.But behind closed doors great rifts are opening up, with Saudi and its Gulf neighbors in one camp, Iran in another and Iraq in a third. Each has issues, both oil-related and political, with the others.
No doubt between now and the next OPEC meeting, whenever the group’s secretary-general or the Saudi oil minister appear in public there will be the usual platitudes of the market being balanced and how they are all comfortable with the price of a barrel.
Those well-versed in OPEC-speak have long smiled knowingly at these gnomic pronunciations, knowing full well that behind closed doors there is furious debate about both price and balance.
Saudi Arabia has pushed that door ajar. OPEC is likely to be one of 2014′s more engrossing energy stories.
GREENPEACE KEEPS NAGGING AT GAZPROM
One of 2013′s more compelling energy stories was Greenpeace’s ongoing campaign against Russia’s mighty Gazprom.
Thirty of the environmentalist group’s campaigners are on bail after the dramatic showdown in the Barents Sea. Greenpeace has taken the public relations battle to the sports field, with a coordinated campaign targeting Gazprom’s sponsorship of Europe’s premier soccer competition, the UEFA Champions League.
There is a chance that the activists being charged in Russia could be the beneficiaries of a seasonal amnesty. Whether or not that happens, Greenpeace vs. Gazprom looks set to run and run.
MARKETS
Crude on both sides of the Atlantic was down in London trading Friday, with Brent’s price down well below its early December highs, while West Texas Intermediate continued to hold on to gains
– WALL STREET JOURNAL
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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