Research and Markets: Nigeria Oil and Gas Report Q4 2012

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/ms6x22/nigeria_oil_and) has announced the addition of the "Nigeria Oil and Gas Report Q4 2012" report to their offering.

“Nigeria Oil and Gas Report Q4 2012”

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 the 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-á-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 2.62mn 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 consumption rising from an estimated 286,000b/d in 2011 to 549,000b/d by 2021.
• BMI forecasts gas production increasing 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 9.27%. 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 5.22bcm in 2011 to 13.17bcm by 2021.
• Nigerian oil reserves are forecast to peak at about 40.05bn barrels in 2015-2016, before coming down to 36.00bn 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 oil 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 forecast OPEC basket oil prices to remain elevated and average US$107.05 per barrel (bbl) in 2012, a figure similar to the 2011 average of US$107.52/bbl in 2012.

Companies Mentioned

Nigerian National Petroleum Corporation (NNPC)

Royal Dutch Shell

ExxonMobil

Chevron

Eni

Total

Afren

ConocoPhillips

ONGC Mittal Energy (OMEL)

Petrobras

BG Group

Gazprom

Addax Petroleum

Oando

Sinopec

Korea National Oil Corporation (KNOC)

Septa Energy

Sunrise

Maurel & Prom

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