Nigerian Oil and Gas Industry – Pathways to Growth

From the inside pages:

“The bottom-line is that, if the refineries of NNPC are to operate sustainably at maximum capacity, it is imperative that they be granted a minimum level of autonomy that allows them to buy their crude oil from whomever/wherever, sell their products to whomever/wherever, and retain such funds therefrom that are required to pay their staff and maintain their equipment and facilities.”

Ian G. Udoh

Read the full document on pdf

INTRODUCTION

With the coming online of Train 6 of the NLNG Complex in December 2007, the growth of the Nigerian Oil & Gas industry has virtually ceased. Previous to this, the last major project in this sector (apart from the previous NLNG Trains and other Gas projects) was the Petrochemicals Complex (EPCL) in Eleme, Rivers State, which was commissioned in 1992.

Domestic refining capacity remains stuck at a nameplate capacity of 445,000 bpd since 1988 (nearly 30 years ago), while actual capacity utilization has declined to less than 20% in recent years, grossly inadequate to meet the growing domestic demand for petroleum products, forcing a near total dependence on products imports at the detriment of the economy.

Similarly, the oil mining operations of NNPC (the National Oil Company), through its subsidiary Nigerian Petroleum Development Company (NPDC) has remained mired at around 120,000 bpd (less than 4% of the Nation’s production), leaving the International Oil Companies in control of over 90% of Nigeria’s oil production.

This submission seeks to provide analyses of the industry in comparison with that of similarly resource-endowed countries, and proffer pathways for growth, and along with targets and timelines.

*Oil Reserves: 37 billion barrels

*Oil Production Capacity:

  • million barrels per day

*Main Producers (95% of Production):

*(1) Shell, Chevron, (2) Mobil (ExxonMobil), (3) AGIP (NAOC), (4) Elf (TotalFinaElf), (5) Texaco (acquired by Chevron)

*Main Oil Terminals (out of 29 in total):

  1. Forcados (Shell)
  2. Bonny (Shell)
  3. Qua Iboe (Mobil)
  4. Escravos (Chevron)
  5. Brass (AGIP)
  6. Pennington (Texaco)

*Gas Reserves:

*187 trillion SCF (Proven)

*600 trillion SCF (Unproven)

  • Nigeria is known as a Gas Region with some Oil, as 70% of her proven hydrocarbon reserves is Gas (in energy content)

*Liquefied Natural Gas (LNG)Facilities:

*Nigerian LNG (NLNG):

  • 6 Trains, 23 LNG Ships
  • Output:
    • LNG = 22 million tons per annum (MTPA)
    • Natural Gas Liquids (NGL) = 5 MTPA

*Proposed:

  • NLNG Train 7
  • Brass LNG
  • OK LNG

*Gas Production:

*Monetized: 7.3 billion SCF per day

*Gas flaring is still significant (wasteful and environmentally harmful)

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