Oil
Shell losing $33m weekly on Nembe Creek Trunkline
LAGOS – Oil giant Shell, through the local Shell Petroleum Development Company of Nigeria, SPDC, has been losing more than $33 million every week since the forced closure of its Nembe Creek Trunkline, NCTL, in the Niger Delta over leakage on the pipeline resulting from vandalism.
Shell declared force majeure on its Bonny Light crude with effect from March 5 as a result of the closure NCTL, one of its two major pipelines in the Niger Delta region.
Reports indicated that the oil giant was likely to lose more as it could not give a date when it would lift the force majeure
SPDC’s second major pipeline in the Eastern Niger Delta, the Trans Niger Pipeline (TNP), that runs through Ogoniland, has also become a target for oil theft and illegal refineries.
The company is due this month to export 168,000 barrels of oil per day of Bonny Light, which was affected by the current force majeure.
In total, Shell and its joint venture partners have already lost over $110million over the week, based on beyondbrics’ calculation.
The calculation is based on the average price of crude which on Tuesday stood at $105 per barrel.
The capacity of the NCTL, which was shut down is 150,000barrels of oil per day.
The federal government taxes onshore oil revenues at 85 per cent, which translates to an impact of 15 per cent for Shell, representing $33million weekly.
The joint venture partners share the cost of operations and quantity of crude oil transported according to their participating interest, with the Nigerian National Petroleum Corporation (NNPC) as the majority shareholder, with a 55 per cent share.
SPDC has a 30 per cent share, Total E&P Nigeria has 10 per cent and Nigeria Agip Oil Company (NAOC) holds the remaining five per cent.
Shortly before SPDC observed an oil leak in the NCTL, the Managing Director of the company, Mr. Mutiu Sunmonu, had said on March 1 that he might consider shutting the pipeline completely.
“The volume being stolen is the highest in the last three years-over 60,000 barrels per day from the SPDC joint venture alone,” he said.
The company, however, said on Tuesday that no decision had been taken on a complete shutdown and that it was mobilising a team to repair the line after an investigation.
There has been a recent upsurge in crude oil theft on the NCTL, resulting in frequent production shutdown and massive oil spills blighting the environment, according to the company.
The NCTL, which was inaugurated in 2010 at a cost of $1.1 billion to replace an older pipeline, has been a target of oil thieves in recent times.
The Nigerian National Petroleum Company Limited (NNPC) has unveiled a bold strategy to reduce methane emissions in the oil and gas sector by 60% by 2031, with an ultimate goal of achieving net-zero emissions by 2060.
This announcement reinforces Nigeria’s leadership role under the Global Methane Pledge initiative and its commitment to tackling climate change.
The Group Chief Executive Officer of NNPC, Mele Kyari, disclosed these plans during a meeting on Thursday with Robert Leahman, the U.S. State Department’s Global Methane Program Manager, and a delegation from Deloitte.
READ MORE: Atiku Gloats Over AUN’s Achievements Ahead Of 20th Anniversary
The discussions, held at the NNPC Towers in Abuja, focused on collaborative efforts to reduce methane emissions through innovative and sustainable practices.
“Reducing methane emissions is not just an environmental necessity but also a strategic imperative for Nigeria’s energy transition. We are leveraging partnerships to adopt global best practices and innovative solutions,” Kyari stated.
Key among these efforts is a pilot project in the Niger Delta, aimed at establishing emissions baselines, mitigating methane leaks, and promoting sustainable operations across Nigeria’s energy sector.
The project, a partnership between NNPC, Deloitte, and the U.S. Bureau of Energy Resources, will utilize data-driven methodologies to pinpoint and address methane hotspots.
Robert Leahman commended Nigeria’s proactive stance, describing it as a benchmark for other nations on the continent.
“Nigeria’s leadership under the Global Methane Pledge sets a standard for the continent. These initiatives will not only help reduce emissions but also drive sustainable development in the energy sector,” he said.
Kyari highlighted the broader benefits of addressing methane emissions, noting its significance for both environmental protection and economic efficiency.
“This collaboration is a game-changer. By addressing methane leaks, we’re reducing waste, saving costs, and protecting the environment. It’s a win-win for our economy and the planet,” he added.
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.
Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones
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.
Tinubu Calls For More Currency Swap With China
BREAKING: Everton Sack Sean Dyche As Manager
Adeleke Distributes Relief Materials To Disaster Victims In Osun State
NANS Protests Appointment Of Éric Sékou Chelle As Super Eagles Coach
Rewane Backs Telecom Tariff Hike, Says It Will Reduce Inflation
Ideye’s Goal Helps Enyimba Defeat Nasarawa United 2-1 In Aba
OSSG Raises Alarm Over Murder Plot By APC Chieftain
NCC, SMEDAN, NAICOM, SEC, Others Set for SUPERNEWS SMEs Conf June 13
Sahara’s Tonye Cole resigns from GPHCDA
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
Oando opens ultra-modern petrol station in Lagos
