Nigerian oil exports on the up

This year has been an impressive one for the Nigerian economy - and much of that is down to the rude health of our domestic oil and gas sector. Oil prices and production have both increased over the year and the effect has been a positive one on the rest of our nation’s economy, with our country recently recording two consecutive quarters of economic growth for the first time in a couple of years. To put that into perspective, the Nigerian economy has shrunk for the last five quarters in a row - and so this rise is a welcome sign that our nation is beginning to bounce back. A positive outlook So, what is behind the up turn? Well, just as our recession was largely due to a slump in oil and gas prices, so an increase in production and improved oil sales is now driving the wider economy. That increase is reflected in our exports of oil too - in...
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What does the recovery in oil prices mean for our industry?

“The global price of oil has a huge impact on our nation’s domestic oil and gas industry,” says our Chairman, Mr Okoloko. “As responsible members of OPEC, we understand that as a nation we have to manage our own levels of production in order to maintain price stability on a global scale. As our own industry has stabilised in recent months, and production levels have recovered, we’ve been able to do our bit to help the global recovery in oil prices that we’re seeing now.” A time for recovery Back in 2014, global oil prices took a huge hit. It’s only in recent years that they have begun to recover - Brent crude prices leapt by around 90 per cent in 2016 - but where are things at now, and what are the implications for Nigeria’s own oil and gas industry? Earlier this year OPEC took the decision to cut production in an effort to support global oil prices - the logic being...
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Nigeria’s changing relationship with OPEC

Back in 1960, The Organisation of the Petroleum Exporting Countries (OPEC) had only five members - Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Over the years since it has grown to include many more countries who have rich natural oil and gas resources – Nigeria joined the organisation in 1971. The OPEC countries founded the organisation with the aim of coordinating and unifying petroleum policies among Member Countries. Benefits on all sides The arrangement was designed to bring huge benefits to both consumers and producers of petroleum products by ensuring fair and stable price for both sides. Thanks to OPEC, the producers can be sure that they will get a fair price for their product, while consumers are guaranteed an efficient and regular supply. This stability is also a major draw for investors in the industry, who see OPEC as an important stabilising force and a guarantor of fairness. So what has Nigeria’s relationship with OPEC been over the years? “Nigeria has benefited...
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How to build a sustainable oil and gas business

Clearly, it is not sustainable - or even desirable - for any nation to become over reliant on the revenues it receives from its huge oil and gas reserves. Any economy that becomes dependent on this single revenue stream at the expense of others - for example agriculture - is leaving itself vulnerable to the vagaries of the global price of crude oil. For a nation as rich in resources, both human and natural, as Nigeria, this is not an acceptable route for our country to go down. But equally, just because it isn’t desirable for our nation to become over dependent on oil and gas, it doesn’t mean that as a sector we shouldn’t still exploit those oil and gas resources to their fullest extent - and continue to benefit our nation’s economy. Rather, we should build sustainability into every aspect of what we do as an oil and gas company - both in terms of our business models and...
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An overview of the Niger Delta

Midwestern Oil and Gas Limited has deep roots in the Niger Delta - after all, back in 2003 we were awarded a 70 per cent interest in Umusadege Field, a part of OML 56, which is located in the north of Delta State. Since then we’ve worked closely with the many different host communities in the region, and have also developed our interests in the state by successfully operating the Umugini Asset Company Limited (UACL), which has constructed a 51.4km pipeline from Umusadege to Eriemu and then into the Trans Forcados Pipeline. As well as the production facility at Umusadege, we have also invested in a Central Processing Facility (CPF) and Group Gathering Facility (GGF) at the site. The Niger Delta - and Delta State in particular - is therefore a key part of our company’s strategy for growth. It’s also an area that is absolutely fundamental to the future development of our nation’s economy. Enormous potential “The Niger Delta - and Delta...
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What are the biggest challenges facing our oil and gas industry?

Our nation’s oil and gas potential is huge. Back in 2015, BP’s Statistical Review of World Energy revealed that we have the largest gas reserves (180.1 trillion cubic feet (Tcf)) and the second largest oil reserves (37.1 billion barrels) in the whole continent of Africa. The same company’s World Energy Review also placed Nigeria as the region’s largest oil producer and the third largest gas producer. It’s a bright picture, that bodes well for our sector - but what are the possible challenges we face as we try to grow our domestic oil and gas industry? An uncertain world economy The global oil price has slumped since 2014, and this uncertainty has led many of the world’s leading operators to start to tighten their belts. Recent years have seen some recovery however, and - while the upturn in prices is slow – it’s clear that companies will soon be able to start thinking about developing more resources. Nigeria is very much a...
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Trends in the Nigerian oil and gas industry

Things are looking up. The last few years have been particularly tough for the world’s oil and gas industry and Nigeria’s operators, as a part of that global market, have suffered accordingly. The indications are, however, that the market is now beginning to move in the right direction. Of course, the degree to which these positive changes can be sustained is very hard to predict - but it’s possibly to say that the outlook for the Nigerian oil and gas industry for the next decade is looking brighter than the previous ten years - with some caveats. Here are some potential trends to look out for. Prices will continue their upward turn The rise in global oil prices hasn’t been spectacular, but it has at least been a rise. Brent crude was up around 90 per cent in 2016, to around US$50 per barrel, and it’s the kind of upward trajectory that will give operators in the sector the encouragement to...
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A response to the amendment to the NLNG (Fiscal Incentives, Guarantees and Assurances) Act

Confidence matters - particularly in the world of finance. It is what drives investment in our businesses, and it is absolutely key to growing and diversifying our country’s oil and gas sector. So, that is just one reason why the recent amendment to the NLNG (Fiscal Incentives, Guarantees and Assurances) Act by the National Assembly is so hugely troubling - because it sends out a worrying message to both potential and existing investors in Nigeria’s domestic oil and gas industry. Investor confidence To understand why, it’s worth taking a step back to look at the reasons behind the change. The current amendment to the act aims to compel The Nigeria Liquefied Natural Gas Limited to pay 3 per cent of its total annual budget to the Niger Delta Development Commission (NDDC) Fund. In response, the company says that being compelled to make the payment will worry international investors, because it appears to renege on a number of previous commitments by the government to...
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Strength through diversification – why a focus on domestic refining and gas can help our country grow

As a nation, we have a huge amount of potential. Consider the resources we have available - not just in terms of the huge wealth of natural resources such as oil and gas, and over 300,000 square kilometres of arable land, but also in terms of our human potential and talent. We have a population of over 177 million and a demographic that is heading in the right direction in terms of growing our economy for the future. We are innovative, hard-working and talented - but there are still a number of big issues holding our nation back. “For a country with our wealth of resources to be so dependent on foreign imports - both in terms of products and expertise - is hugely damaging,” says our Chairman, Mr Onajite Okoloko. “As a nation we need to make sure that we are taking our future into our own hands, by investing internally in the infrastructure and institutions that will drive sustainable...
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Nigerian oil and gas companies are investing more in innovation

The recent announcement that Nigeria will soon be hosting the biggest oil and gas trade show in Africa is a real sign of the times. The inaugural Nigeria International Petroleum Summit (NIPS) will be held early next year in Abuja, and while many of the details about the event are yet to be firmed up, one thing is very clear already. “This is a time of exciting and groundbreaking innovation in our indigenous oil and gas industry,” says our Chairman, Mr Onajite Okoloko. “Shows like NIPS are testament to this - it is a gathering of the brightest minds in our industry that shows our growing commitment to innovation.” An age of innovation The sheer scale and ambition of the show is certainly encouraging, as it will be an opportunity for the industry to come together to share best practice, the latest technologies and to discuss the emerging trends in our ever-changing industry. It’s also a chance to showcase innovative new products and...
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