Oil
Sudan currency at new low ahead of oil deadline
LONDON – Sudan’s currency hit a new low on Tuesday, traders said, ahead of Khartoum’s deadline to shut a pipeline carrying South Sudanese oil worth billions of dollars to both impoverished nations. One United States dollar sold for 7.35 Sudanese pounds, black market traders said.
The pound has now lost about 46 percent of its value on the widely used black market since September 2011, after South Sudan separated earlier that year with most of the formerly united country’s oil production. The pipelines and the Red Sea export terminal remained in the north but a fee dispute led the South to shut its production early last year.
Khartoum and the South’s government in Juba reached a deal in March allowing the oil to flow again, as part of timetables to implement nine economic and security pacts. Then, in a surprise move, Khartoum last month gave companies 60 days to stop transporting oil from South Sudan after President Omar al-Bashir accused the Juba government of backing rebels in the north. Juba denies supporting the insurgents and in turn says Khartoum assists rebels on southern soil. Observers say both countries have engaged in the practice. On Monday the African Union and east African bloc, the Inter-Governmental Authority on Development, inaugurated a panel to probe allegations of rebel support by each side.
Regional nations also began determining the centreline of a demilitarised buffer zone that is to straddle the 2,000-kilometre (1,240-mile) undemarcated border between the two countries. While this process and the investigation of alleged rebel support take place, the AU and IGAD called on both states “to refrain from any unilateral action”, an AU statement said on Monday. Sudan’s Oil Minister Awad Ahmad al-Jaz on Tuesday confirmed the 60-day deadline unless South Sudan complies with all nine pacts which were confirmed in March and included the demilitarised zone designed to cut cross-border rebel support, the official SUNA news agency said. Sudan froze the nine agreements in June, blaming the South’s alleged support for cross-border insurgents.
“I think the reason for the pound’s fall is the decision to shut the pipeline,” one black market trader said, asking for anonymity. “There is a shortage of dollars in the market,” another trader said. South Sudan separated two years ago under a peace deal that ended a 22-year civil war. The split left Khartoum without most of its export earnings and half of its fiscal revenues, leaving the government searching for alternatives to oil revenue. Inflation, fuelled by the government’s printing of money, exceeded 40 percent earlier this year but moderated to 27 percent in June, according to official figures.
The International Monetary Fund estimated in May that Sudan’s economy would get a boost of about $1.5 billion in 2014 if the oil deal were implemented. South Sudan would gain billions of dollars in revenue from its oil exports. Sudan uses multiple official exchange rates, including a central rate for government transactions which on Tuesday stood at 4.3980-4.4200 for one US dollar, according to SUNA.
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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