Oil
United States and allies no longer needs Nigerian Oil-investigation
President Obama
LAGOS-THERE are high indications that the United States of America and a major part of its western allies may no require Nigerian crude oil to run their country.
This is propelled by surging shale output as the United States is fighting for supremacy in the global oil market even as a pullback in crude prices threatens to challenge the boom.
The US, which is just coming out of debilitating economic recession may have already overtaken other petroleum giants. In terms of crude alone, the US pumped 8.8 million barrels a day in September, still a distance from Russia’s 10.6 million barrels and Saudi Arabia’s 9.7 million, according to official sources.
But when natural gas liquids are included, the US extracted 11.5 million barrels in August, essentially level with OPEC kingpin Saudi Arabia, according to data from the International Energy Agency. Regardless of whether it is at or near the top of the global petroleum pecking order, the US is rethinking its decades-old ban on oil exports in light of the boom as energy emerges as an increasingly important foundation of the US economy. At the same time, the US boom “has been changing the worldwide market,” said James Williams, energy economist for WTRG Economics. “It’s the thing that has put pressure on OPEC. ”The pace of growth has been staggering, with US output rising nearly 60 percent since its low in 2008.During previous booms, the US added one million barrels per day of output over the course of a decade.“ Today we’re growing supplies by one million barrels every year,” said Francisco Blanch, head of commodity research at Bank of America Merrill Lynch.
“This is by far the biggest and fastest expansion in US oil production in history.”– Nigerian oil not needed –The boom in US oil output has sharply cut the amount of crude the US imports from leading petroleum producers, freeing up more oil for overseas markets and sometime pressuring prices.In July, the US imported no oil from OPEC member Nigeria for the first time since 1973.
“There’s no reason for it now, because we have more light oil from the Bakken, Eagle Ford and the Permian Basin,” Williams said. “We have too much light oil. ”The boom has also spawned calls from oil industry players to ease the US embargo on crude exports, which has been in place since the 1970s oil shocks. Some manufacturers also endorse the move. A report Tuesday by the Aspen Institute said lifting the ban would boost durable goods production by some $8 billion by 2017, in part due to greater sales of mining and construction equipment.
Even as the crude exports ban remains in place, US regulators have shown leniency in allowing more oil-based exports. Exports of diesel and other petroleum products have soared over the last five years.US oil exports reached 420,000 barrels a day in early October, the highest level since 1957. These gains have come from shipments of minimally refined oil. Some companies are also building special refineries to permit such exports.
Consultancy Wood Mackenzie predicted “incremental policy changes” to US trade practices rather than “a material change in the overall export policy.”– Boom at risk? –The IEA has projected that US oil production will continue to increase through 2020, but will level off soon thereafter. However continued growth depends heavily on commodity prices and US output could suffer disproportionately from a big retreat in prices. Surging US production has been a major factor in the 20 percent decline in oil prices since June, even though political tensions have remained high through many parts of the oil-rich Middle East and North Africa region.
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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