Oil
Sonangol ‘to exit Iraq’
JOHANNESBURG – Angolan state oil company Sonangol reportedly has decided to exit Iraq due to security concerns, with Italy’s Eni also threatening to do the same unless key contracts are signed in the next few weeks.
Sonangol won in 2009 the right to operate the Qayara and Najmah oilfields in the Nineveh province in north-west Iraq where Sunni Islamist insurgents remain active.
Board member in charge of international investments, Anabela Fonseca, told a news conference on Tuesday the decision to leave the troubled Middle East country was taken as the company was unable to develop the projects due to their location in a region of “much conflict”, Reuters reported.
Eni chief executive Paulo Scaroni was last week reported as saying by Upstream the Italian giant was prepared to quit the country due to frustrations over bureaucratic delays in developing the southern Zubair oilfield under a technical service contract.
Red tape and poor infrastructure, as well as increasing security concerns, have left some oil majors, including Eni, disgruntled with doing business in the country.
“If they do not sign the contracts in a couple of weeks we will go. We have waited six months,” Scaroni was quoted as saying on the sidelines of a conference on Tuesday.
But he added: “I am hopeful, we have no reason to believe they won’t do it (sign).”
Eni, as operator of Zubair, has been forced to lower the output target for the supergiant field near Basra to 850,000 barrels per day from a previous figure of 1.25 million bpd.
Production from the field is now running at 320,000 barrels per day compared with around 195,000 bpd in 2009 when Eni won the service contract.
Eni hopes to increase production from Zubair to 400,000 bpd by the end of this year.
A Milan-based oil analyst said of the company’s threat to quit the country: “I think it’s just tactics. Eni would find it hard to pull out since they’ve already invested heavily.”
Industry sources said the process may be slowed due to the distractions of national elections in April and rising violence in the western Anbar province, where Baghdad is battling militants.
Eni has previously said every investment it makes in Iraq is subject to a bid that then has to go to different institutions for approval.
Under Iraq’s service contract, the Oil Ministry must approve contract awards above $100 million.
Scaroni said at the group’s strategy meeting earlier this month he believed contracts “should be approved in 45 days”.
“It happens that it is approved in nine months, sometimes six, sometimes one year,” he added.
Meanwhile, BP has had to let around 100 contractors go after the Oil Ministry failed to approve crucial contracts for its nearby megaproject at Rumaila, Iraq’s biggest oilfield.
However, industry sources said the UK supermajor has no intention whatsoever of leaving Iraq, with Rumaila now producing at its highest rate – between 1.4 million and 1.5 million bpd.
Oil companies such as ExxonMobil, which has a 25% stake in Iraq’s West Qurna 1 project, have been beating a path to the northern semi-autonomous region of Kurdistan where more attractive production sharing contracts are on offer and investment conditions appear more stable.
The US supermajor is set to start drilling on its Kurdistan acreage after signing exploration pacts with the regional government, with other major players including Chevron, Hess, Repsol and Marathon, with partner Total, following suit.
However, Baghdad has deemed such deals with the region as illegal under the federal constitution and has previously threatened to kick ExxonMobil out of its Iraqi acreage unless the company abandons its Kurdistan blocks.
– UPSTREAM ONLINE
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.
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.”
Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy
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.
$2bn Renewable Energy Funds Under Scrutiny As Reps Summon Ministers
If It’s A Fair Election, I’ll Concede Defeat – Trump
Buhari Grieves Over Borno Flood, Jigawa Tanker Explosion
US Election: Davido Celebrates Voting For The First Time
Many Married Women Sexually Dissatisfied Says Eva Alordiah
Painkillers Damaged My Kidney, Says Ufoma McDermott[VIDEO]
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
Oando opens ultra-modern petrol station in Lagos
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
