Nigeria's oil and gas Industry

Nigeria: African Powerhouse

Nigeria’s oil and gas industry has come a long way since oil was discovered in the Niger Delta in 1956, with the nation now boasting the largest reserves in Africa. The hydrocarbons sector is the major breadwinner for the country in terms of foreign exchange earnings and represents around 80% of the nation’s budget revenues. The OPEC member has often held the position of top crude producer in Africa, although competing countries in the region have recently come neck-to-neck with the West African nation.

The oil and gas sector is dominated by NOC Nigerian National Petroleum Corporation, which regulates and participates in all areas of the industry’s value chain. While the country contains many hydrocarbons-rich basins, the majority of producing assets are crowded around the prolific Niger Delta basin in the south of the country.

The country’s regulatory issues and fiscal uncertainties have long been challenges for international investors looking to participate in the market and have led to significant delays or cancellations of prospective projects. The government has continuously reformed its policies to address these issues and open the market while successfully increasing safety of its assets.

Traditionally an oil producing country, Nigeria has struggled to transition towards gas and beyond fossil fuels as the global industry moves towards reducing carbon emissions and utilising more green energy sources. To address this, the government set up the Gas Master Plan in 2008 that has propelled the country to develop gas infrastructure, including gas processing plants, pipelines and gas-to-power and petrochemical facilities.

The country aims to set itself up both as a top producer and potential refining hub for the region through several large projects, including the 650,000-bopd Dangote Refinery. However, nearby countries have also made efforts to up their refining potential and could potentially take a large share of regional refining.