Oil
Shell reaps $1.7bn from upstream divestments in Nigeria, others
LAGOS – The Royal Dutch Shell raked in $1.7 billion (N268.6 billion) from upstream divestment in Nigeria, Gulf of Mexico and Canada in the fourth quarter of 2012.
The divestments mainly included Shell’s 30 per cent interest in Oil Mining Lease 30 (Shell share of production 11 thousand bpd) in the Niger Delta, 50 per cent interest in the Holstein field (Shell share of production 5,000 bpd) in the Gulf of Mexico and interest in the Seal area (Shell share of production 2000 bpd) within the Peace River oil sands of Alberta, Canada.
Shell made this disclosure in its fourth quarter and full year 2012 unaudited results released by the company at the weekend.
Commenting on the result, Shell Chief Executive Officer, Peter Voser, stated: “We are delivering a strategy that others can’t easily repeat, with unique skills in technology and integration and a worldwide set of opportunities for new investment.”
Although the economic outlook remains uncertain for some of Shell’s key markets, Voser said the prospects for long-term growth in global energy demand remained unchanged, driven by rising world population and improving standards of living in developing countries.
“Meeting this demand growth with clean and affordable energy is a formidable challenge for our industry and it is a major opportunity for Shell,” he added.
He confirmed Shell’s growth agenda, which aims to deliver $175-$200 billion of total cash flow from operations for 2012-2015, a net capital spending programme of $120-$130 billion, and a competitive dividend for shareholders.
Shell’s efforts to expand its pipeline of potential energy projects are paying off, said Voser.
“Our drive to increase our options for future projects means that we are more constrained by limits on capital than by limits on opportunities,” he said. “This allows us to prioritise the most attractive opportunities, and reconfigure or exit from less attractive ones.”
Voser further hinted that Shell would continue to maintain its investment programme through the economic cycle.
“We make long-term decisions on capital allocation and growth choices, and we look through short-term market volatility,” he said.
“As our cash flow momentum builds, we expect to increase our dividends for shareholders in measured, affordable steps. There is more to come from Shell,” Voser said.
Shell would continue the strategic drive to grow its upstream businesses, with ongoing selective investment in downstream.
At the end of 2012, the company had 12.4 billion bpd of resources on stream, averaging 3.4 million bpd of production, and 20 billion barrels of oil equivalent, boe, of resources potential in our active development funnel.
Total resources in these two categories represent 26 years of current production. Shell has 30 new projects under construction, which should unlock seven billion barrels of resources, and drive continued financial and production growth.
Upstream start-ups in 2010-15 are expected to add some $15 billion of cash flow in 2015, in a $100 oil price scenario. Some 50 per cent of its 2013 capital investment will contribute to cash flow by 2015.
Oil & gas production is expected to average four million bpd in 2017-2018 compared to 3.3 million bpd in 2012.
Shell’s strategy in upstream is designed to drive financial growth, irrespective of production entitlement, with production growth regarded as a long-term proxy for financial growth.
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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