Nigeria Oil & Gas Upstream Market Growth, Trends, COVID-19 Impact, and Forecasts Report 2021-2026 - ResearchAndMarkets.com

DUBLIN--(BUSINESS WIRE)--The "Nigeria Oil & Gas Upstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.

The Nigeria oil & gas upstream market is expected to grow at a CAGR of more than 2.0% over the period of 2021-2026.

As of January 2021, the number of rigs working in the offshore and onshore fields reduced drastically in the country owing to the lack of investments and the negative impact of the COVID-19 pandemic. The country's economy has witnessed a significant contraction due to the decline in the revenues generated from the hydrocarbon industry.

However, factors such as an anticipated recovery in the demand for oil and gas and governmental push towards increasing exploration and production activities in the country are expected to aid the growth of the market. On the flip side, the country is plagued by political instability and large-scale corruption which are expected to restrain the growth of the market.

The development of gas infrastructure in Nigeria is expected to drive the commercialization of the gas that is already being flared but also is expected to attract investments in the gas reserves that are currently underdeveloped.

The government has instigated reforms in the sector including new laws which are expected to provide opportunities for the market players

Nigeria's offshore oil and gas industry continues to expand, albeit not very fast, opening more market opportunities. The growth of Nigeria's offshore exploration and production activities has been mainly driven by the efforts of the government to develop the country's oil and gas industry.

Key Market Trends

Growing Investments in Gas Infrastructure to Drive the Market

• Nigeria is one of the major oil and gas producers in the Africa region, accounting for about 25% of oil and 21% of gas production in the region as of 2019. But during 2013-2019, the oil production in the region declined due to several factors, including a low and volatile oil price environment, political instability, militant attacks on the country's oil and gas infrastructure, and others. During the 2018-2019 period, oil production increased due to relatively higher oil prices. But in the first quarter of 2020, the oil prices registered a sudden decline, which, in turn, is expected to affect oil production negatively.
• On the other hand, gas production has registered a significant rise in the last ten years. During 2009-2019 period, gas production in the country increased by over 200%. But the gas flaring is the cause for wastage of a large amount of gas. Despite the introduction of the Natural Gas Flare Commercialization Program introduced in 2016, the stats provided by NNPC indicate that the flaring has been increasing. Some of the factors that are causing the operators to flare the gas are the lack of infrastructure, legislation, pricing regulations, and consumers ready to buy gas.
• The country has started to invest heavily in the gas infrastructure as the country plans to become an export hub in Africa, by exporting not only to regional countries but also to the other Asian countries, like India and China. Additionally, the country has significant domestic demand for gas mainly from the power sector. The gas-fired power plants in the country are consistently under-utilized due to lack of uninterrupted gas supply. The country also has a potential domestic demand from the commercial, residential, and industrial sectors. By building the country-wide gas distribution network, the Nigerian government aims to tap into this potential.
• New projects in the country include the development of ultra-deepwater Egina oilfield by Total is one of the key projects, which started production in the first week of 2019. Further investment in the Egina field may significantly boost the production and cash flow, in 2019, and continue onward.
• The development of this infrastructure is not only expected to drive the commercialization of the gas that is already being flared but also is expected to attract the investments in the gas reserves that are currently underdeveloped.

Competitive Landscape

The oil and gas upstream sector in the country is majorly dominated by government-owned companies. Private companies operate in joint ventures and collaboration with NNPC, the national oil company of Nigeria.

Some of the key players operating in this market include

• Nigerian National Petroleum Corporation
• Royal Dutch Shell PLC
• Chevron Corporation
• Exxon Mobil Corporation
• Total SA

For more information about this report visit https://www.researchandmarkets.com/r/c4v2uq