Nigeria's economy is heavily dependent on the oil sector, which account for nearly 80% of government revenues and over 90% of total foreign exchange earnings. The sector contributed a total of 10.44% to the country’s Gross Domestic Product (GDP)in 2014. Estimates of the total crude oil reserves vary, but are generally accepted to be about 36 billion barrels, although new offshore discoveries are likely to push this figure to about 40 billion barrels. Nigeria’s proven natural gas reserves are approximately 185 trillion cubic feet, making Nigeria tenth largest reserves in the world and approximately 30% of African gas reserves.
The federal government through the Nigerian National Petroleum Corporation(NNPC)operates seven joint venture partnerships with International Oil Companies. Six operators of the seven joint venture partners with NNPC (Shell, Mobil, Chevron, Agip, Elf and Texaco) produce about 95% of Nigeria’s crude oil. It is estimated that $7 billion capital investment per year will be necessary to fund explorationand development to achieve the Nigeria’s Crude oil production targets. Government has issued 13 licensesto crude oil producers for the construction of additional private refineries to refine at least 50 percent of their production in the country.
Nigeria has proven to be among the most investment–friendly nations for International Oil Companies because of her geological configuration of its terrain and relative security of investments.Major International Oil Companies (IOC) have continued their operation in the country over the years. Currently, the number of oil producing and exporting companies operating in the country stand at eleven (11) including Total, Chevron, ExxonMobil, Elf, Texaco, ConocoPhillips Eni and others.
As part of the reforms measure to reposition the oil and gas sector in order to serve the country better, the Nigerian National Petroleum Corporation will be unbundled into two – a regulator and an investment entity. The aim is to introduce transparency, efficiency and due process in the discharge of the duties of the corporation. The new Administration will also introduce a system of independent, transparent auctioning for licenses of right of drilling and exploration in the country.
The focus of the government's policy on the Oil and Gas sector is as follows:
• To exploit the hydrocarbon resources for the benefit of all Nigerians and other stakeholders
• To maintain self-sufficiency in refining
• To ensure regular and uninterrupted domestic supply of all petroleumproducts at reasonable prices
• To establish infrastructure for the production of refined products for export
• Liquidification of natural gas.
• Increase local Gas utilization and end Gas flaring
Some of the major activities in which investment opportunities abound include.
- Surveying - tropical and planimetric; and sea bottom survey.
- Civil Works- mud pit construction, concrete works at rig sites.
- Seismic data acquisition and interpretation.
- Drilling operations.
- Crude oil transportation and storage.
- Exploration and production of oil and gas products.
- Manufacturing of consumable materials in exploration such as explosives,
- Detonators, steel casting, magnetic tapes etc.
- Search for development of local substitutes for items such as medium pressure valves, pumps, shallow drilling equipment, drilling mud, bits fittings, drilling cement etc.
- Gas treatment
- Crude Oil and Gas conversion into refined and petrochemical Products and finer chemicals
- Transportation and Marketing of the products
- Related ancillary services
- Refining, Petrochemicals and Gas Utilization
- Lower investors' risk.
- Nigeria's production cost per barrels is one of the lowest worldwide.
- Huge reservoirs of hydrocarbon are found in Nigeria.
- Government has provided generous fiscal terms both for oil production and gas utilization.
- The Executive Secretary/CEO,
Nigerian Investment Promotion Commission (NIPC)
Plot 1181, Aguiyi-Ironsi Street,
Tel: +234 (09) 2904882, +234 7 0634 6232
- The Honourable Minister,
Federal Ministry of Petroleum Resources
Block D, 5th -11th Floor, NNPC Towers,
Central Business District, Herbert Macaulay way, Abuja.
http: www.mpr.gov.ng, www.nnpcgroup.com