Energy
From The Report: Nigeria 2015
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Still Africa’s largest oil producer, with an industry that in past decades has fuelled the growth of what is now its largest economy, Nigeria has the biggest reserves on the continent. Local operators are expanding their share of production, while domestic services companies are boosting capacity to meet local content requirements. Yet the sector faces steep challenges, from policy uncertainty amid looming legislative reform to output disruptions due to unrest in the Niger Delta, the heart of its producing region. These obstacles have only been exacerbated by falling crude prices, which halved in the second half of 2014. Although oil has traditionally dominated Nigeria’s production mix, natural gas looks set to gain more ground in the coming years, thanks largely to the forecast increase in demand from the recently privatised electricity sector and investments by state-owned Nigerian National Petroleum Corporation (NNPC) in gas aggregation and transport infrastructure, which are strengthening supply links to power plants.

This chapter contains interviews with George Osahon, Director, Department of Petroleum Resources (DPR); Ernest Nwapa, Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB); and Adewale Tinubu, Group CEO, Oando.

Articles from this Chapter

Overview

Vast energy reserves waiting to be unlocked in Nigeria
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Still Africa’s largest oil producer, with an industry that in past decades has fuelled the growth of what is now its largest economy, Nigeria has the most voluminous reserves remaining on the continent. Yet it faces steep challenges, from policy uncertainty amid looming legislative reform to output disruptions due to unrest in the Niger Delta, the heart of its producing region. These obstacles have only been exacerbated by falling crude prices, which halved in the second half of 2014. Nigeria’s…

Interview

George Osahon, Director, Department of Petroleum Resources (DPR): Interview
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Interview:George Osahon What sort of initiatives will the DPR be undertaking to encourage development of marginal fields? GEORGE OSAHON: We have a number of awareness campaigns on the operation of marginal fields targeted at existing holders. Only eight of the 24 fields awarded in 2003 are on-stream, while the others face challenges ranging from technical through financial to managerial issues, including poor cooperation among parties. We are looking into these challenges with a view to assisting.…

Analysis

The oil and gas landscape evolves for local and international producers
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The landscape of onshore exploration and production (E&P) joint ventures has shifted considerably in recent years. Nigeria and Angola, the two most mature oil players in Africa, have witnessed the most mergers and acquisitions (M&A) on the continent of late, according to Standard Chartered. With some 2.2bn barrels of oil equivalent (boe) sold by international oil companies (IOCs) to indigenous players in the four years to 2014, local independents are now taking on an even larger role in production,…

Interview

Ernest Nwapa, Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB): Interview
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Interview: Ernest Nwapa How would you describe the impact of the Local Content Act on the oil and gas sector? ERNEST NWAPA: We are seeing growth in every segment of the industry, particularly in operating and service companies. Things that we once said could never be done in Nigeria are now almost taken for granted. We are fabricating large and complex offshore modules and subsea structures, manufacturing oil and gas equipment and components, and owning and operating offshore rigs and other marine…

Analysis

New projects under way in Nigeria to increase gas production, ease transmission and meet demand using more local resources
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With one of the world’s most comprehensive privatisation efforts taking place in Nigeria’s electricity sector, the problem of ensuring adequate natural gas supply for power generation has taken centre stage. Although natural gas production has steadily increased in recent years in line with domestic supply obligations and the broad road map of the Gas Master Plan (GMP), development of the required gas pipeline infrastructure in a country where it has traditionally been fragmented between regions…

Analysis

The government is looking to expand the role of domestic players in the industry
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Four years after the passage of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in April 2010, the results are clearly visible. In terms of in-country spend, the changes have been especially dramatic, although there is still ample room for Nigerian firms to expand in services, fabrication and integration particularly. The pace of local content expansion may accelerate yet further as the Nigerian Content Development and Monitoring Board (NCDMB) stiffens its enforcement of the act,…

Analysis

Demand for refined petroleum products pushes capacity expansion in Nigeria’s energy sector
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Given the scale of demand for petroleum products in both Nigeria and the broader ECOWAS region, the country stands to gain significant export revenues if it increases downstream production. Nigeria’s four refineries, though they raised their capacity utilisation rate somewhat in 2014, remain low at around the 30% mark overall, despite being allocated their full capacity of 445,000 barrels per day (bpd) in crude. “The Nigerian National Petroleum Corporation (NNPC) allocations of crude to the refineries…

Interview

Adewale Tinubu, Group CEO, Oando: Interview
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Interview: Adewale Tinubu To what extent is the recent ConocoPhillips acquisition inciting more asset sales to indigenous firms? ADEWALE TINUBU: International oil companies (IOCs) are divesting even more onshore assets within Africa due to a strategic refocus on offshore exploration, and the successful acquisition of ConocoPhillips’ Nigerian business unit proves that the era of the indigenous major is here. I believe the acquisition is exemplary and will serve as a benchmark for our local peers…