Nigeria Oil & Gas Upstream Market - Growth, Trends, and Forecasts (2020 - 2025)
The market comprises of various stages in the upstream sector (Exploration, Development, and Production)
ABOUT THIS REPORT
Scope of the Report
Key Market Trends
TABLE OF CONTENTS
Need a report that reflects how COVID-19 has impacted this market and its growth?
Nigeria plans to double its crude oil production from 2.05 Mmbopd in 2018 to nearly 4 Mmbopd by 2025, registering a CAGR of less than 10% during the forecast period. Investment in the Nigerian upstream oil and gas sector declined by 13% annually, during 2015-2017, due to the downturn in the crude oil price. The decline in spending was largest in 2016, driven by severe disruptions on major oilfields. The drilling activity in the country is ramping up and is expected to continue on account of current and upcoming projects. However, production is not expected to ramp up in the coming years, as the new projects that are expected to come online may be able to offset the declining volume from brownfields, keeping the oil supply stable, provided the political situation does not exacerbate, leading to renewed supply disruption.
The development of gas infrastructure in Nigeria is expected to drive the commercialization of the gas that is already being flared but also is expected to attract the investments in the gas reserves that are currently underdeveloped.
Development of ultra-deepwater Egina oilfield by Total is one of the key projects, which started production in the first week of 2019. The Egina field may significantly boost the production and cash flow, in 2019, and continue onward.
The country is further seeking self-reliance in terms of fuel supply and planning to almost double its production and reach 4 MMbopd by 2025.
Nigeria's offshore oil and gas industry continues to expand, albeit not very fast, opening more market opportunities. The growth of Nigeria's offshore exploration and production activities has been mainly driven by the efforts of governments in their region
Scope of the Report
The Nigeria oil & gas upstream market report include:
Report scope can be customized per your requirements. Click here.
Key Market Trends
Growing Investments in Gas Infrastructure
Nigeria is a major oil and gas producer in the Africa region, accounting for about 25% of oil as well as gas production in the region. But during 2013-2017, the oil production in the region declined due to combination factors, including low and cyclic oil price environment, political instability, terrorist attacks on the infrastructure, among others. During 2018, the oil production increased due to relatively higher oil prices. But in the first quarter of 2020, the oil prices registered a sudden decline, which, in turn, is expected to affect oil production negatively.
On the other hand, gas production has registered a significant rise in the last ten years. During 2009-2018, gas production in the country increased by over 200%. But the gas flaring is the cause for wastage of a large amount of gas. Despite the introduction of the Natural Gas Flare Commercialization Program introduced in 2016, the stats provided by NNPC indicate that the flaring has been increasing. Some of the factors that are causing the operators to flare the gas are the lack of infrastructure, legislation, pricing regulations, and consumers ready to buy gas.
But the country has started to invest heavily in the gas infrastructure, for the following reasons:
The country plans to become an export hub in Africa, by exporting not only to regional countries but also to the other Asian countries, like India and China.
Nigeria has significant domestic demand for gas mainly from the power sector. The gas-fired power plants in the country are consistently under-utilized due to lack of uninterrupted gas supply. The country also has a potential domestic demand from the commercial, residential, and industrial sectors. By building the country-wide gas distribution network, the Nigerian government aims to tap into this potential.
The development of this infrastructure is not only expected to drive the commercialization of the gas that is already being flared but also is expected to attract the investments in the gas reserves that are currently underdeveloped.
To understand key trends, Download Sample Report
Offshore Sector to Witness a Huge Growth
Nigeria's offshore oil and gas industry continues to expand, albeit not very fast, opening up more market opportunities. The growth of Nigeria's offshore exploration and production activities has been mainly driven by the efforts of governments in their region, such as providing key incentives and supporting policies to unlock the investment opportunity, as well as a growing list of international oil and gas companies interested in exploring alternative fields to replace the maturing offshore producing sites.
The China National Offshore Oil Corporation has mobilized a USD 3 billion investment, in addition to the USD 14 billion already spent on its existing oil and gas operations in the West African country. A large share of this investment goes into the operations in Nigeria. One of the most ambitious ultra-deep offshore projects is the Egina oil field in water depths of between 1,400 and 1,700 meters. Total projected that the oil field is expected to peak at 200,000 barrels/day.
Further, since 2008, the Nigerian government has been trying to pass the Petroleum Industry Bill (PIB). The country lost billion dollars of investments due to the failure to pass the bill. One section of the bill was finally passed in 2018, as the Petroleum Industry Governance Bill (PIGB). Under this, the oil sector will be restructured, including the national oil company, the oil and gas regulator, the Department of Petroleum Resources (DPR), and the Nigerian National Petroleum Corporation (NNPC), which will become the National Petroleum Company (NPC), a fully commercial integrated entity. This reform is expected to drive the Nigerian offshore oil and gas upstream market.
To understand geography trends, Download Sample Report.
The oil and gas sector in the country is dominated by the government-owned companies. Private companies operate in joint venture and collaboration with NNPC, the national oil company of Nigeria. Some of the key players Nigerian National Petroleum Corporation, Royal Dutch Shell PLC, Chevron Corporation, Exxon Mobil Corporation, and Total SA.