Nigeria Oil and Gas Upstream Market Booms as Key Players Drive Growth in Every Sector

The Nigerian oil and gas upstream market are anticipated to register a Compound Annual Growth Rate (CAGR) of over 2.0% during the period from 2021 to 2026. As of January 2021, the offshore and onshore rig count experienced a significant reduction in the country due to project scarcity and the adverse impacts of the COVID-19 pandemic.

The economic contraction resulting from diminished revenues in the hydrocarbon industry has been substantial. However, factors such as an anticipated recovery in oil and gas demand and regulatory initiatives to boost exploration and production activities are expected to foster market growth. On the flip side, political instability and widespread corruption are likely to impede market growth.

Key Features:

The development of the gas infrastructure in Nigeria is poised to drive the commercialization of flared gas and attract investments in untapped gas reserves.

Government-led sectoral changes, including new regulations, are anticipated to provide lucrative opportunities for market players.

Despite a slow expansion in Nigeria’s offshore oil and gas industry, continuous efforts by the government are creating more market opportunities.

Key Market Trends:

  • Growing Investments in Gas Infrastructure:

    Nigeria, a major oil and gas producer in Africa, has been making efforts to strengthen its gas infrastructure. Despite being a significant gas producer, a considerable amount of gas is flared. The introduction of the Gas Flare Commercialization Program aims to reduce gas flaring and encourage investments in gas infrastructure. The country’s focus is on becoming a gas hub in Africa, exporting not only to regional nations but also to Asian countries like India and China. To meet domestic demand from the power sector and capitalize on potential exports, substantial investments are being made in building a comprehensive gas distribution network.

  • Offshore Sector to Experience Significant Growth:

    Nigeria’s offshore oil and gas industry continue to expand, albeit at a moderate pace, creating more market opportunities. Government initiatives, such as key incentives and supportive policies, have been instrumental in opening up potential opportunities for international oil and gas companies exploring alternative fields to replace maturing offshore producing sites. Notably, the Egina oil field, one of the ambitious ultra-deepwater projects, started production in 2019, contributing to increased production and revenue.