Nigeria Oil and Gas Report Q3 2012

Published : August 2012
No. of Pages : 101

Price:

BMI View: With several projects in the pipeline or due to come onstream over the next few years, such as
Usan (180,000b/d) and Egina (150,000b/d-200,000b/d), we expect Nigerian oil output to rise
substantially over our forecast period to 2021. In addition, attempts to cut gas flaring will boost the
outlook for gas production. Nevertheless, OPEC quotas, the risk of project delays and Nigeria’s political
environment, particularly vis-a-vis the PIB, still imply a significant amount of uncertainty.
The main trends and developments we highlight for Nigeria’s Oil and Gas sector are as follows:
􀂃 BMI expects oil production to increase from an estimated 2.53mn barrels per day (b/d) in 2011
to 2.75mn b/d by 2021, as ambitious projects, such as Usan (180,000b/d ) and Egina
(150,000b/d-200,000b/d) come onstream.
􀂃 Consumption of crude is forecast to rise at an annual average of 6.29% rate between 2011 and
2021, boosted by anticipated strong GDP growth. We forecast that consumption will rise from
an estimated 286,000b/d in 2011 to hit 549,000b/d by 2021.
􀂃 BMI forecasts that gas production will increase from an estimated 34.71bn cubic metres (bcm)
in 2011 to 82.61bcm by 2021, as the authorities and companies reduce the practice of flaring and
start monetising associated gas resources.
􀂃 Gas demand is set to rise at an annual average growth rate of 12.60%. Booming demand from
the government’s ambitious power sector plans and large export engagements will thus bolster
production growth. We see Nigerian gas consumption rising from an estimated 5.72bcm in 2011
to 17.19bcm by 2021.
􀂃 Nigerian oil reserves are forecasted to peak at about 40.05bn barrels in 2015-2016, before
coming down to 27.90bn barrels by 2021, whereas gas reserves are expected to peak at 5.95trn
cubic metres (tcm) in the 2014-2016 period, before falling back to 5.80tcm in 2021.
􀂃 In terms of infrastructure, the authorities have ambitious plans in liquefied natural gas (LNG)
and refining. However, the downstream sector remains highly inefficient and, despite a
nameplate capacity of 505,000b/d, actual output is often around 100,000b/d. Many projects have
been proposed, but there has been no update indicating that any are progressing. Considering the
country’s past woes in the sector, we have decided not to include these projects in our forecasts.
Nigeria’s dependence on energy prices leads to high volatility in the country’s export revenues. Our
assumptions of tight supply due to booming demand in emerging markets is clearly an opportunity for the
country. As a result, we assume OPEC basket oil prices to increase from US$107.52 per barrel (bbl) in
2011 to US$111.47/bbl in 2012, thus creating an upside risk for the Nigerian macroeconomic outlook.

BMI Industry View 5
SWOT Analysis . 6
Nigeria Oil and Gas SWOT 6
Global Energy Market Outlook 7
Table: Oil Production Forecasts, 2010-2016 (‘000 b/d) 7
Table: Oil Consumption Forecast, 2010-2016 (‘000 b/d) . 13
Regional Energy Market Outlook . 14
Nigeria Energy Market Overview . 18
Table: Nigeria – Upstream Projects Database 21
Industry Forecast Scenario 23
Oil and Gas Reserves . 23
Table: Nigeria Oil & Gas – Historical Data And Forecasts, 2009-2016 . 23
Table: Nigeria Oil & Gas – Long-Term Forecasts, 2014-2021 24
Oil Supply and Demand 25
Gas Supply and Demand . 27
Revenues and Import Costs 29
Key Risks to BMI’s Forecast Scenario 29
Oil And Gas Infrastructure . 30
Oil Refineries 30
Table: Refineries In Nigeria 31
Oil Terminals/Ports 33
LNG Terminals 33
Table: LNG Projects In Nigeria 36
Gas Pipelines 36
Regional and Country Risk/Reward Ratings 38
Table: Upstream Risk / Reward Ratings 41
Table: Downstream Risk / Reward Ratings 42
Nigeria’s Upstream Rating – Overview 42
Nigeria’s Upstream Rating – Rewards . 42
Nigeria’s Upstream Rating – Risks 43
Nigeria’s Downstream Rating – Overview. 43
Nigeria Downstream Rating – Rewards 43
Nigeria Downstream Rating – Risks . 43
Competitive Landscape 44
Executive Summary . 44
Table: Key Players – Nigerian Oil And Gas Sector 45
Overview/State Role 45
Licensing and Regulation . 45
Petroleum Industry Bill and NNPC Reform 46
Local Content Requirements 47
IOC Contract Renegotiation 47
Government Policy . 48
Licensing Rounds 54
Table: Key Nigerian Upstream Players 55
Table: Key Nigerian Downstream Players. 55
Nigeria Oil & Gas Report Q3 2012
© Business Monitor International Ltd Page 4
Company Monitor . 56
Nigerian National Petroleum Corporation (NNPC) 56
Royal Dutch Shell . 59
ExxonMobil . 61
Chevron . 63
Eni . 67
Total . 70
Afren . 72
ConocoPhillips – Summary 75
ONGC Mittal Energy (OMEL) – Summary 75
Petrobras – Summary 76
BG Group – Summary 76
Gazprom – Summary . 77
Addax Petroleum – Summary . 78
Oando – Summary 78
Sinopec – Summary . 79
Korea National Oil Corporation (KNOC) – Summary . 79
Septa Energy – Summary 80
Sunrise – Summary . 80
Maurel & Prom – Summary . 80
Others – Summary 81
Africa – Regional Appendix 83
Table: Oil Consumption Historical Data & Forecasts, 2009-2016 (‘000b/d) 83
Table: Oil Consumption Long-Term Forecasts, 2014-2021 (‘000b/d) 84
Table: Oil Production Historical Data & Forecasts, 2009-2016 (‘000b/d) 84
Table: Oil Production Long-Term Forecasts, 2014-2021 (‘000b/d) . 85
Table: Refining Capacity Historical Data & Forecasts, 2009-2016 (’000b/d) 86
Table: Refining Capacity Long-Term Forecasts, 2014-2021 (‘000b/d) . 86
Table: Gas Consumption Historical Data & Forecasts, 2009-2016 (bcm) . 87
Table: Gas Consumption Long-Term Forecasts, 2014-2021 (bcm) 88
Table: Gas Production Historical Data & Forecasts, 2009-2016 (bcm) . 88
Table: Gas Production Long-Term Forecasts, 2014-2021 (bcm) 89
LNG Net Exports Historical Data & Forecasts, 2009-2016 (bcm) 90
LNG Net Exports Long-Term Forecasts, 2014-2021 (bcm) 90
Methodology And Risks To Forecasts 91
Glossary Of Terms . 92
Table: Glossary Of Terms . 92
Oil And Gas Risk/Reward Ratings Methodology 94
Ratings Overview 94
Table: BMI’s Oil & Gas Business Environment Ratings – Structure 95
Indicators . 95
Table: BMI’s Oil & Gas Upstream Ratings – Methodology 95
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology 97
BMI Methodology . 99
How We Generate Our Industry Forecasts 99
Energy Industry 99
Cross checks 100
Sources .100Table: Oil Production Forecasts (‘ b/d)
Table: Oil Consumption Forecast (‘ b/d)
Table: Nigeria – Upstream Projects Database
Table: Nigeria Oil & Gas – Historical Data And Forecasts
Table: Nigeria Oil & Gas – LongTerm Forecasts
Table: Refineries In Nigeria
Table: LNG Projects In Nigeria
Table: Upstream Risk / Reward Ratings
Table: Downstream Risk / Reward Ratings
Table: Key Players – Nigerian Oil And Gas Sector
Table: Key Nigerian Upstream Players
Table: Key Nigerian Downstream Players
Table: Oil Consumption Historical Data & Forecasts (‘b/d)
Table: Oil Consumption LongTerm Forecasts (‘b/d)
Table: Oil Production Historical Data & Forecasts (‘b/d)
Table: Oil Production LongTerm Forecasts (‘b/d)
Table: Refining Capacity Historical Data & Forecasts (’b/d)
Table: Refining Capacity LongTerm Forecasts (‘b/d)
Table: Gas Consumption Historical Data & Forecasts (bcm)
Table: Gas Consumption LongTerm Forecasts (bcm)
Table: Gas Production Historical Data & Forecasts (bcm)
Table: Gas Production LongTerm Forecasts (bcm)
Table: Glossary Of Terms
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology

Nigeria Oil and Gas Report Q3 2012

Published By: Business Monitor International

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