Oil
Statoil to Postpone 2020 Production Target
PARIS – Norwegian oil company Statoil ASA has postponed its 2020 production target of 2.5 million barrels a day by two to three years and is reducing its planned capital expenditure, as the company looks to follow competitors in chasing margins over big production numbers.
Statoil said it would lower its planned capital expenditure to an average of $20 billion a year through 2016, a reduction of 8%, to free up cash.
The state-controlled company is the latest oil major to pull back on breakneck capital spending, as potentially lucrative big projects have brought high costs. Royal Dutch Shell PLC similarly has said it will rein in spending as it seeks to boost profits.
“We could deliver 2.5 million barrels a day in 2020, and more than that, if we wanted, because Statoil’s resource base has never been stronger,” Statoil Chief Executive Helge Lund told The Wall Street Journal. “We are prioritizing value creation rather than growing as fast as possible.”
Along those lines, Statoil’s board proposed to increase the company’s dividend to 7.00 Norwegian kroner a share in 2013 from 6.75 kroner in 2012. The company said it would propose to the annual general meeting in May that quarterly dividend payments replace annual ones. Statoil also said it intended to use share buybacks more actively going forward.
The company’s fourth-quarter net profit was 14.8 billion kroner ($2.4 billion), or 4.66 kroner per share, up from 12.98 billion kroner a year earlier with help from Statoil’s $2.65 billion sale of assets to Austrian oil company OMV AG . The figure differs from net profit as reported by U.S. oil companies because it includes changes in the value of inventories.
Statoil’s adjusted earnings before interest and taxes, which exclude inventory effects and are regarded as a key performance metric, were 42.3 billion kroner in the quarter, down 12% on the year and missing analysts’ forecast of adjusted Ebit of 44.97 billion kroner.
The company said it expected to complete around 50 exploration wells in 2014, and to spend about $3.5 billion in exploration this year, in line with last year.
Statoil’s fourth-quarter oil-and-gas production fell 4% on the year to 1.945 million barrels of oil equivalent a day, as new fields and ramp-ups were countered by natural decline on mature fields, asset sales, redeterminations and lower gas sales. The company said it expects production to grow on average 3% annually through 2016, from 1.85 million barrels a day for all of 2013.
The company’s international production rose 5% on the year to 740,000 barrels a day amid ramp-ups at Marcellus and Eagle Ford in the U.S., Peregrino in Brazil and PSVM in Angola, but the segment’s adjusted earnings fell 38% on the year due to a higher share of gas, lower prices and a high depreciation cost in the U.S. onshore business, Statoil said.
Production in Norway fell 9% on the year to 1.205 million barrels a day.
The company received on average 608 kroner a barrel for its oil, condensate and natural-gas-liquids sales in the fourth quarter, up 4% on the year due to a weaker kroner. Measured in dollars, the price was down 2% on the year at $100.40 a barrel.
The company got on average 2.09 kroner per cubic meter for its natural gas, down 1% on the year.
Statoil posted fourth-quarter revenue of 147.8 billion kroner, down from 159.19 billion kroner a year ago and compared with analyst expectations of 168.59 billion kroner.
Statoil shares were up 0.9% to 150.40 kroner Friday morning, having traded as low as 144.60 kroner earlier. The company was valued at 470 billion kroner at Thursday’s closing price of 149.00 kroner, up 17% from six months ago.
– WALLSTREET JOURNAL
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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