Oil
Sliding Libyan oil output brightens Nigeria’s export prospects
ABUJA – The fall-out of the Libyan political crisis that nearly crippled the country’s oil production may boost Nigeria’s exports of sweet crude next month.
As traders await the October loading schedule, they confirmed that the development had already impacted positively on September exports, which were reportedly completely sold.
“Most September cargoes are sold and differentials have been supported by outages in Libya as well as a summer maintenance-related slowdown in North Sea output. It might be another slow month for the heavy crude but the light could get some pull from Libya,” this was one West African trader’s view of how October dealing may shape up.
There were indications that oil production in the North African country may completely halt soon. The nation had last week confirmed that oil production fell to around 150,000 barrels per day (bpd), from around 250,000 bpd in August.
A board member of Libya’s National Oil Corporation, Bilqasim Shindeer el-Shibany confirmed, “oil exports almost entirely have stopped.”
To add to the government’s woes, the capital, Tripoli, has been hit with water cuts for three days and electricity outages for the past few months lasting around four hours daily.
Libya’s prime minister faced increasing calls for his ouster, as strikes by government employees at oil export terminals estimated to have cost the North African country more than $5 billion in losses.
Nigeria’s light oil is apparently bridging the supply-gap in the market, as it exports 63 cargoes of crude oil, totaling 58.2 million barrels or 1.94 million barrels per day (mbpd) for the month of September 2013.
Angola is closely behind Nigeria, as it unveils plans to export 1.70 mbpd of crude in October, an increase of 30,000 bpd from September, according to a loading schedule.
Angola will export 52.8 million barrels on 55 tankers three more than were scheduled to load in September.
Prime Minister Ali Zidan has struggled to reign in the combustible mix of tribal feuds, disgruntled employees and renegade militias fueling the crisis. The country’s nascent police and army have been unable to secure the country following the eight-month-long civil war in 2011 that toppled dictator Moammar Gadfhafi.
Libya was producing 1.6 million barrels of oil per day under Gadhafi and was exporting around 1.2 million barrels daily. Production stopped briefly during the civil war, but picked up within months of Gadhafi’s capture and killing at the hands of rebels, who now comprise many of the militias.
Gunmen in the west of Libya have disrupted oil supplies used mostly for the domestic market and closed down three major pipelines.
As, at last week, only three export terminals, Marsa Brega and the Jurf and Bouri platforms, remain open. Officials said there were two vessels waiting to load at the port of Hariqa in far eastern Libya, which are having difficulty finding crude from shut oilfields.
The energy committee of the General National Assembly, in touch with senior oil officials, said in a statement that production had almost “reached zero” due to the prolonged stoppages and was “causing huge losses to the Libyan state that would directly impact the livelihoods of ordinary Libyans.
“Production has stopped as a result of the port closures and production has reached almost zero,” the head of the GNA’s energy committee, Naji Mukhtar said.
Mukhtar said the continued strike was hurting Libya’s international credibility and risked losing it long term customers.
Libya’s central bank has warned that if the situation remains as it is through the end of the year, the country could lose its contracts with foreign companies. Bank officials said the national budget and the government’s ability to pay civil servants would also be severely impacted.
– THE GUARDIAN
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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