Nigeria Oil and Gas Industry

Nigeria oil and gas industry is witnessing turbulent times with factors like gas flaring and deteriorating condition of Niger Delta region affecting sustainable growth of this sector of national economy. Nigeria is among top ten nations of world with a rich reserve of natural gas of approximately 159 trillion cubic feet. It has a dearth of advanced infrastructure in oil and gas industry of Nigeria, which has failed to stop gas flaring, which accounts for about 40% of natural gas it produces. Nigerian government set 1st January 2009 as a latest deadline to stop flaring natural gas from oil wells in Niger Delta.

Rising competition for oil wealth in Niger Delta region has now emerged as a major crisis faced by oil and gas industry in Nigeria. Persistent pressure from MEND or “The Movement for the Emancipation of the Niger Delta”, to find a ready solution to this crisis has speeded up process of Niger Delta summit. President Yar’Adua and leaders of oil and gas industry at Nigeria are bent upon finding long-term solutions.

Oil and gas reforms initiatives are being undertaken by government of Nigeria in later half of 2008 with a purpose of restructuring Nigerian oil and gas industry and triggering its growth. Enhancing standard of products and creating investor-friendly environment in Nigeria’s oil industry are also high on priority list. Government of Nigeria expects to implement these reforms successfully ensuring expansion of Nigeria oil and gas industry and also its ancillary sectors.

International oil and gas companies are using Nigeria as their exploring base. Addax Petroleum, a Canadian company, discovered onshore oil discovery on oil mining license (OML) 124 located in Imo State of southern Nigeria. Afren, an Africa-focused independent company set up Okoro Setu project in shallow water Block OML 112 offshore Nigeria in last month of 2008 and it has proven to be prolific with an average production of 18,500 barrels of oil per day

Foreign oil and gas producers are targeting Nigerian offshore oil and gas field for buying stake. CNOOC, China’s state-run oil and gas producers is in process of buying 45 percent stake in license covering OML 130 field in deep water near Niger Delta for $2.3bn. In recent developments, Nigeria’s oil and gas industry plans to expand its oil reserves from 35.2 billion barrels to 40 billion barrels by 2010.

Nigerian National Petroleum Corporation has come out with estimates stating an investment requirement of $7 billion and $15 billion respectively to sponsor development and fulfill natural gas development goals of Nigeria oil and gas industry.