Nigeria Oil and Gas Report Q2 2010
Business Monitor International, April 2010, Pages: 119
Business Monitor International's Nigeria Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Nigeria's oil and gas industry.
The latest Nigeria Oil & Gas Report from BMI forecasts that the country will account for 11.92% of African regional oil demand by 2014, while providing 22.72% of supply. African regional oil use of 2.93mn barrels per day (b/d) in 2001 rose to an estimated 3.57mn b/d in 2009. It should average 3.63mn b/d in 2010 and then rise to around 4.08mn b/d by 2014. Regional oil production was 7.77mn b/d in 2001, and in 2009 averaged an estimated 9.64mn b/d. It is set to rise to 11.83mn b/d by 2014. Oil exports are growing steadily, because demand growth is lagging behind the pace of supply expansion. In 2001, the region was exporting an average 4.83mn b/d. This total had risen to an estimated 6.07mn b/d in 2009 and is forecast to reach 7.75mn b/d by 2014.
In terms of natural gas, in 2009 Africa consumed an estimated 123bn cubic metres (bcm), with demand of 194bcm targeted for 2014. Production of an estimated 248bcm in 2009 should reach 385bcm in 2014, which implies net exports rising from 125bcm in 2009 to 191bcm by the end of the period. In 2009 Nigeria consumed an estimated 14.65% of the region’s gas, with its market share forecast at 27.34% by 2014. It contributed 18.18% to estimated 2009 regional gas production and, by 2014, will account for 21.04% of supply.
For 2009 as a whole, we have assumed an average OPEC basket price of US$60.70 per barrel (bbl), a 35.5% decline year-on-year (y-o-y). For 2010, we expect to see a significant oil price recovery to US$83.00/bbl for the OPEC basket price, gaining further ground to US$85.00 in 2011 and US$90.00/bbl in 2012 and beyond.
In 2010, BMI is now forecasting premium unleaded gasoline prices at an average US$97.00, up from US$70.22/bbl in 2009. We are assuming an average global jet fuel price for 2010 of US$97.58/bbl, compared with US$70.63 in 2009. For gasoil, the 2010 price estimate is for an average of US$97.40/bbl, compared with US$70.50 in 2009. The 2010 naphtha price average, estimated at US$81.58/bbl compares with US$59.07 in 2009.
Nigerian real GDP is assumed by BMI to have risen by 6.9% in 2009, compared with 6.0% growth in 2008. We are assuming average annual growth of 7.0% in 2010-2014. We expect oil demand to rise from an estimated 376,000b/d in 2009 to 493,000b/d in 2014, representing up to 3%-5% annual growth. Stateowned Nigerian National Petroleum Corporation (NNPC) accounts for more than 50% of oil production and over 40% of gas supply, but has a large number of international oil company (IOC) partners contributing to a forecast rise in oil and liquids production from an estimated 1.99mn b/d in 2009 to 2.70mn b/d by 2014 – subject to rebel attacks on infrastructure and OPEC quota policy. Gas production should reach 81bcm by 2014, up from an estimated 45bcm in 2009. Consumption is expected to rise dramatically from around 18bcm to 53bcm by the end of the forecast period, allowing exports of no more than 28bcm. This threatens the country’s liquefied natural gas (LNG) export business unless fresh supplies can be located and developed.
Between 2009 and 2019 we forecast an increase in Nigerian oil and gas liquids production of 71.3%, with volumes rising steadily to 3.40mn b/d by the end of the 10-year forecast period. Oil consumption is set to increase by 88.4%, with growth slowing to an assumed 7.5% per annum towards the end of the period and the country using 708,000b/d by 2019. Gas production is expected to rise to 125bcm by the end of the period. With demand rising by 288.9% between 2009 and 2019, export potential should increase to 55bcm, largely in the form of LNG. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Nigeria now shares third place in BMI’s updated Upstream Business Environment Ratings, alongside Angola and Algeria. It may struggle to keep up with Angola over the short term, as its West African neighbour has greater potential for advancement. Nigeria’s score benefits from its substantial oil and gas reserves, its oil and gas production growth outlook, and high reserves-to-production ratios (RPR). The competitive landscape features numerous non-state companies, while licensing terms are generally acceptable, although potentially under review. However, negative country risk factors undermine the hydrocarbons-specific strength. The country is in the upper half of the league table in BMI’s Downstream Business Environment rating, with a few high scores but near-term progress further up the rankings deemed unlikely. It is ranked fourth behind Algeria, thanks largely to poor country risk factors that undermine further a regulated and largely state-controlled industry. Algeria is four points above it in the regional rankings and looks set to stay out of reach. Angola just one point below represents a mediumterm threat.
Executive Summary
SWOT Analysis
- Nigeria Political SWOT
- Nigeria Economic SWOT
- Nigeria Energy Market Overview
Global Oil Market Outlook Q110
- Not So Bleak Midwinter
- Oil Price Forecasts
- Global Oil Market Review Q409
- Quarterly Trends
- Nigeria And Iraq Pose Problems
- Oil Supply, Demand And Price Outlook Q110
- Table: Global Oil Consumption (000b/d)
- Short-Term Demand Outlook
- Table: Global Oil Production (000b/d)
- Short-Term Supply Outlook
- Longer-Term Supply And Demand
- Oil Price Assumptions
- Table: Crude Price Assumptions 2010
- Table: Oil Price Forecasts
- Regional Market Overview
- Oil Supply And Demand
- Table: Africa’s Oil Consumption, 2007-2014 (000b/d)
- Table: Africa Oil Production, 2007-2014 (000b/d)
- Oil: Downstream
- Table: Africa’s Oil Refining Capacity, 2007-2014 (000b/d)
- Gas Supply And Demand
- Table: Africa’s Gas Consumption, 2007-2014 (bcm)
- Table: Africa’s Gas Production, 2007-2014 (bcm)
- Liquefied Natural Gas
- Table: Africa’s LNG Exports/(Imports), 2007-2014 (bcm)
- Business Environment Ratings
- Africa Region
Composite Scores
- Table: Regional Upstream Business Environment Ratings
- Table: Regional Downstream Business Environment Ratings
- Upstream Scores
- Downstream Scores
- Nigeria’s Upstream Rating – Overview
- Nigeria’s Upstream Rating – Limits Of Potential Returns
- Nigeria’s Upstream Rating – Risks To Realisation Of Returns
- Nigeria’s Downstream Rating – Overview
- Nigeria Downstream Rating – Limits Of Potential Returns
- Nigeria Downstream Rating – Risks To Realisation Of Returns
Business Environment
- Legal Framework
- Infrastructure
- Labour Force
- Foreign Investment Policy
- Tax Regime
- Security Risk
Industry Forecast Scenario
- Oil And Gas Reserves
- Oil Supply And Demand
- Gas Supply And Demand
- LNG
- Refining And Oil Products Trade
- Revenues And Import Costs
- Table: Nigeria Oil & Gas – Historical Data & Forecasts
- Other Energy
- Table: Nigeria Other Energy – Historical Data & Forecasts
- Key Risks To BMI’s Forecast Scenario
- Long-Term Oil And Gas Outlook
- Oil And Gas Infrastructure
- Oil Refineries
- Table: Refineries In Nigeria
- Oil Terminals/Ports
- LNG Terminals
- Table: LNG Projects In Nigeria
- Gas Pipelines
- Macroeconomic Outlook
- Table: Nigeria – Economic Activity, 2007-2014
Competitive Landscape
- Executive Summary
- Table: Key Players – Nigerian Oil & Gas Sector
- Overview/State Role
- Licensing And Regulation
- Government Policy
- Licensing Rounds
- Table: Key Nigerian Upstream Players
- Table: Key Nigerian Downstream Players
Company Monitor
- Nigerian National Petroleum Corporation (NNPC)
- Royal Dutch Shell
- ExxonMobil
- Chevron
- Eni
- Total
- CNOOC – Summary
- ONGC Mittal Energy (OMEL) – Summary
- Petrobras – Summary
- BG – Summary
- Gazprom – Summary
- Afren – Summary
- Addax Petroleum – Summary
- Oando – Summary
- Sinopec – Summary
- Korea National Oil Corporation – Summary
- Others – Summary
- Oil & Gas Outlook: Long-Term Forecasts
- Regional Oil Demand
- Table: Africa Oil Consumption, 2012-2019 (000b/d)
- Regional Oil Supply
- Table: Africa’s Oil Production, 2012-2019 (000b/d)
- Regional Refining Capacity
- Table: Africa’s Oil Refining Capacity, 2012-2019 (000b/d)
- Regional Gas Demand
- Table: Africa’s Gas Consumption, 2012-2019 (bcm)
- Regional Gas Supply
- Table: Africa’s Gas Production, 2012-2019 (bcm)
- Nigeria Country Overview
- Methodology And Risks To Forecasts
Glossary Of Terms
- BMI Forecast Modelling
- How We Generate Our Industry Forecasts
- Energy Industry
- Cross Checks
- Oil And Gas Ratings Methodology
- Table: Structure Of BMI’s Oil & Gas Business Environment Ratings
- Indicators
- Table: BMI’s Upstream Oil & Gas Business Environment Ratings – Methodology
- Table: BMI’s Downstream Oil & Gas Business Environment Ratings – Methodology
- Sources
- Nigerian National Petroleum Corporation (NNPC)
- Royal Dutch Shell
- ExxonMobil
- Chevron
- Eni
- Total
- CNOOC
- ONGC Mittal Energy (OMEL)
- Petrobras
- BG
- Gazprom
- Afren
- Addax Petroleum
- Oando
- Sinopec
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