West Africa Oil and Gas Upstream Market - Growth, Trends, and Forecasts (2020 - 2025)

The market is segmented by Location (Onshore, Offshore) and Geography (Nigeria, Ghana, Ivory Coast, Senega, and Rest of West Africa)

Market Snapshot

Study Period:

2018-2025

Base Year:

2019

CAGR:

6.7 %

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Market Overview

The market for oil and gas upstream in West Africa is expected to register a CAGR of approximately 6.7% during 2020-2025. The crude oil production for the West African region is expected to record a CAGR of approximately 9.63% and natural gas production is expected to be approximately 5.15% during the forecast period. Major factors driving the market are strong economic growth after the refurbishment of crude oil prices post 2015 and increasing oil and natural gas production in the major countries, such as Nigeria and Ghana. However, the slump in oil price due to decreased demand in the first quarter of 2020 is, in turn, expected to incur losses of billions of dollars for oil producers in the West African region, if prices stay below USD 30 / barrel. The vandalism of oil and gas infrastructure and theft of petroleum products resulted in a business loss for the stakeholders, and factors like these reduce the confidence in making investments in oil and gas projects, which is anticipated to restrain the West African upstream market during the forecast period.

  • Africa's offshore exploration and production activities are expected to dominate the market, mainly due to their relative insulation from vandalism as these sites are comparatively less accessible for the terrorist, as well as the vandalism groups in the region, such as the attack on Anadarko Petroleum LPG project in northern Mozambique, in February 2019.
  • The recent offshore discovery of oil and gas in Senegal showcases the potential of the West African offshore region, which is largely untapped, for which the National Oil Company of Senegal, PETROSEN, officially launched the licensing round for 12 blocks in January 2020. Also, there are several other offshore discoveries recorded in the region, which are expected to create a lucrative opportunity for oil and gas upstream companies to invest in this region.
  • Nigeria dominated the market due to a large number of upstream projects coming up in the country as the operators started gaining confidence and with increased production with a rise in crude oil prices after a slump. Therefore, Nigeria is expected to dominate the market during the forecast period.

Scope of the Report

The West African oil and gas upstream market report includes:

Location
Onshore
Offshore
Geography
Nigeria
Ghana
Ivory Coast
Senegal
Rest of West Africa

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Key Market Trends

Offshore Segment to be the Fastest Growing Market

  • The onshore sector in the West African region is prone to terrorist activities, unlike the offshore sector, which makes investors focus on the offshore market as a result of which numerous offshore projects and discoveries came up, and the onshore sector remains undiscovered.
  • West Africa’s offshore oil and gas industry continues to expand, albeit not very fast, opening up more market opportunities. West Africa’s offshore deep and ultra-deep space has continued to attract oil explorers and producers in increasing their operations, especially in Southern and Western Africa, where major projects have either started or have been unveiled, awaiting resource appraisal and development.
  • The growth of West Africa’s offshore exploration and production activities have been mainly driven by the efforts of governments in their region, to provide key incentives and supporting policies to unlock the investment opportunity, as well as a growing number of international oil and gas companies interested in exploring alternative fields to replace the maturing offshore producing sites in countries, such as Nigeria and Ghana.
  • As the region’s newest oil and gas producer, Ghana saw the highest growth in oil production in 2018 among its peers. In 2018, Ghana launched its first offshore licensing round for six blocks. This contributed to the growth in offshore exploration activities in the country.
  • China National Offshore Oil Corporation 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. In addition to this, 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.

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Nigeria to Dominate the Market

  • Nigeria is expected to dominate the West African oil and gas upstream market during the forecast period. With growing oil and gas activities and the increasing demand for crude oil produced in Nigeria, which has low sulfur content is expected to drive the Nigerian oil and gas upstream market.
  • Nigeria is one of the largest and oldest oil producers in Africa. The oil and gas sector is one of the most important sectors in the country’s economy, accounting for more than 90% of the country’s exports and 80% of the Federal Government’s revenue. As of 2018, Nigeria produced 2,051 thousand barrels of oil daily and was the largest producer in West Africa.
  • However, Nigeria is struggling to cope with liquidity, insufficient revenue, and convertibility issues. The country is vigorously adopting measures to overcome economic recession and exploring various alternative revenue sources, especially through gas commercialization and infrastructure development.
  • Moreover, the recent price crash due to decreased demand globally arising from COVID-19 has exposed the country’s economy to be highly vulnerable, as Nigeria’s budget for 2020 was based on USD 57/ barrel of crude oil price. Further, it is expected to damage government revenues and post a threat to the viability of upstream projects.
  • Due to militant activities, aging oilfields, lack of governance reforms, and a lack of new investments merged, along with the slump in oil price, starting from 2014-2015, Nigeria’s oil and gas upstream market has been hampered in the past. The oil rigs and well-completed count, along with the net crude oil production decreased during the period, but once the oil price started to rise again, the upstream activities began to increase, in turn, impacting the crude oil production and the number of well completion activity in the country positively.

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Competitive Landscape

The West African oil and gas upstream market is consolidated and the key players in the market include Royal Dutch Shell Plc, Total SA, Eni SpA, Exxon Mobil Corporation, and Nigerian National Petroleum Corporation.

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Table Of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Macro-economic Condition of the Oil and Gas Industry

    3. 4.3 Crude Oil Production and Forecast in thousand barrel per day, till 2025

    4. 4.4 Natural Gas Production and Forecast in million ton oil equivalent, till 2025

    5. 4.5 Recent Trends and Developments

    6. 4.6 Government Policies and Regulations

    7. 4.7 Market Dynamics

      1. 4.7.1 Drivers

      2. 4.7.2 Restraints

    8. 4.8 Supply Chain Analysis

    9. 4.9 Porter's Five Forces Analysis

      1. 4.9.1 Bargaining Power of Suppliers

      2. 4.9.2 Bargaining Power of Consumers

      3. 4.9.3 Threat of New Entrants

      4. 4.9.4 Threat of Substitutes Products and Services

      5. 4.9.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Location

      1. 5.1.1 Onshore

      2. 5.1.2 Offshore

    2. 5.2 Geography

      1. 5.2.1 Nigeria

      2. 5.2.2 Ghana

      3. 5.2.3 Ivory Coast

      4. 5.2.4 Senegal

      5. 5.2.5 Rest of West Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Key Company Profiles

      1. 6.3.1 Royal Dutch Shell Plc

      2. 6.3.2 Total SA

      3. 6.3.3 Eni SpA

      4. 6.3.4 Exxon Mobil Corporation

      5. 6.3.5 Nigerian National Petroleum Corporation, NNPC

  7. *List Not Exhaustive
  8. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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