The Oil And Gas Industry In Nigeria 

 

 

December 19, 2005

 

Petroleum and Gas Reserves
 
The proven Nigerian oil reserves are 23 Billion barrels; the gas reserves are 160 Trillion cubic meters.
 
Petroleum and Gas Policy Objectives
  1. The country has put in place Petroleum and Gas policy with the following objectives:  
  2. Increasing oil reserve base and productivity through vigorous exploration and ensuring judicious exploitation of the resource.
     
  3. Allowing for private sector participation in all the facets of the industry through attractive fiscal measures. Government is giving serious consideration to selling its equity shares in joint venture operation.
     
  4. Acquiring reasonable market shares for the crude oil and its derivatives and achievement of domestic refining self-sufficiency.
Expanding the utilization of natural gas.  
 
Up-stream Sector -Down-stream Sector; Gas Development and Conversion; and Marketing of Nigeria crude oil.  
The Upstream Sector
Activities under the upstream sector include:

Surveying: Geodetic control establishment; Mapping, tropical and plan metric; and Sea Bottom Survey/Investigation.  
Civil Works: Site Surveys; Preparation of drilling locations; Construction of mud pits and slabbing or concreting jobs at rig sites. Supplies of cement, chemicals, sands, gravel, iron rods, labour, road mat, timber, etc.  
Seismic Data Acquisition and Interpretation: Analysis and interpretation of data acquired from seismic and geodetic surveys - such data on soil land rock samples.  
Geological Activities: Wire line, logging, core analysis, geological and geochemical studies. 
Drilling Operations: Drilling and work-over rigs; field transportation and equipment for haulage and rig movements; general and specialized service such as casing running, cementation, welding, diving and catering; and provision of mud and other chemicals.  

Crude Oil Transportation & Storage: Construction and maintenance of crude oil storage tanks and pipelines.  
Exploration and Production: Investors wishing to participate in this venture are welcome. This involves applying for block(s) for exploration through the oil prospecting license (OPL) and the oil-mining lease (OML). Currently, emphasis is shifting from production sharing contract (PSC) to Service Contract.  
Pursuant to the above, the Oil Exploration License (OEL) confers on the licensee, renewable on expiration.  
The Down-Stream Sector  
Refining
(a) industrial and food grade solvents;
(b) insecticides
(c) cosmetics
(d) mineral oil, petroleum jelly greases;
(e) bituminous-based water/damp proof building materials such as floor tiles,
(f) exports of refined products surplus;
Petrochemicals
A three-phased petrochemical development plan is in place. The first phase is already in place producing:
The second phase, an olefin based complex has been commissioned; and
Investors can engage in products fabrication.
Gas Development and Conversion
Government has opened the sector to foreign investment and is willing to consider appropriate tailor – made incentives for projects in this sector. Opportunities which abound in this sector for investors include:-  
Natural Gas Pipeline Network
Plans are a foot to build and extend gas pipeline in view of the importance of gas. Investors wishing to set up energy intensive industries such as cement factories, iron smelting and foundries will have a significant cost saving if gas is used as fuel.
In furtherance of the spirit of the treaty of ECOWAS (the Economic community of West African States) which seeks to encourage co – operation between member states for the overall improvement of their economies, Nigeria embraced the West African Gas pipeline concept conceived by the World Bank as a means of meeting the energy requirement of Ghana, Togo and Benin Republic by supplying them with natural gas from Nigeria on purely commercial terms.
The Liquefied Natural Gas Project (LNG)
The Nigerian LNG project is being implemented in phases with an initial production from two trains. The plant is situated at Bonny Island. NLNG has successfully secured market for its moderate production volume from its base project and train three.
NEW GAS SYSTEMS
There is more Gas than Oil, in Nigeria. While the country's oil reserve could last for about 31 years that of gas could be depleted in about 72 years, according to recent authoritative report.
In spite of this abundance, local gas utilization is constrained by limited transmission systems and even lack of same in some parts of the country. This hinders greatly, the transmission, distribution and marketing of the product in many parts of the nation.
Currently, there is a proposal by the Nigerian government to construct additional four transmissions systems including Ajaokuta – Abuja - Kaduna, and Aba – Enugu - Gboko at the estimated cost of $2 billion.

For more information contact:
Nigerian National Petroleum Corporation
NNPC Towers, Herbert Macaulay Way
Central Business District
FCT - Abuja
Nigeria
Website: www.nnpc-nigeria.com

Nigerian Liquefied Natural gas
Nigeria LNG Limited,
C & C Towers, Plot 1684 Sanusi Fafunwa Street,
Victoria Island, P.M.B. 12774 (Marina), Lagos, Nigeria.
Tel: +234-1-2624190-4, 2624556.
Fax: +234-1-2616976.
Website: www.nigerialng.com
email: feedback@nlng.com