Oil
South Sudan crisis deepens as President sacks cabinet
LONDON – The oil industry is bracing itself for the impact of South Sudanese President Salva Kiir’s decision to sack his entire cabinet. including his second in command.
The oil-rich country is already in somewhat of a state of crisis as it continues to wind down production under recent orders from its neighbour to the north, Sudan, which should eventually see a total halt to flows by 7 August.
In the latest development in an ongoing power struggle, Kiir issued a decree axing all his ministers, including vice president and chief rival Riek Machar.
Of more direct significance to the country’s oil industry, Kiir also sacked Pagan Amum, secretary-general of the ruling Sudan People’s Liberation Movement, SPLM. Amum has been the country’s senior negotiator in ongoing oil and security talks with Sudan.
Extra security has reportedly been set up around ministry buildings with a radio address appealing for calm among the populace in reaction to the bold presidential move.
South Sudan, already financially crippled from previous shut-ins following its split from Sudan in July 2011, is facing the prospect of once again having no stable commodity to fill the country’s coffers for some time.
The land-locked country has no export infrastructure of its own and so must send oil through Sudan’s pipelines for discharge at ports in the Red Sea. When it gained independence, South Sudan took with it about three quarters of the once unified country’s total oil reserves.
Khartoum recently ordered South Sudan to begin shutting in all production unless it halted its support of insurgents along the countries’ border, an allegation Juba has denied.
Production was swiftly slashed from 200,000 barrels per day to 160,000 bpd and was set to hit about 100,000 bpd last weekend.
South Sudan’s Oil Minister Stephen Dhieu Dau said recently: “This unilateral decision by the government of Sudan to stop the flow of the oil to the international markets is unjustifiable and it will affect the oil investment climate.”
A series of letters between the two nations ended with Khartoum ordering a complete shut-in by 7 August.
“This has left us with limited options on how to find a lasting solution to the issue,” Dau explained.
On the sacking of cabinet by Kiir, a Juba-based analyst, who wished not to be identified, told the UK’s Guardian newspaper: “The international community must urgently ensure this crisis does not spiral into a full-blown catastrophe. They must appeal for calm and demand President Kiir respect the constitution and uphold democracy.
“This is a crisis that has been looming for months, if not years. The international community – and particularly South Sudan’s strongest backers in the US and Europe – have done a great disservice to the people of the new country by ignoring the signs, allowing the corruption, poor governance, and political repression at the root of yesterday’s events go unchecked for so long.
“(The crisis) threatens not just the country and its people, but also the fragile relationship between South Sudan and Sudan.”
– UPSTREAM
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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