What 2018 has in store for our sector

As we head into a new year, it feels like a good time to look ahead to the coming 12 months and to consider what 2018 might have in store for the Nigerian oil and gas industry. Last year was one in which we saw a tentative recovery in the global oil price, and a stabilisation of Nigerian production that allowed us to return to play our full role as an important part of the OPEC family. So what is the outlook for the coming year? "Moving into 2018, we're building on some firm foundations in the sector," says our Chairman, Onajite Okoloko. "Our government's 2017 Appropriation Act - the so-called ‘Budget of Recovery and Growth’ - projected 2.2 million barrels per day in terms of crude oil output, and we have been far below that for a sustained period, I think that it bodes well for 2018 that this ambition is there. As a nation, we're currently abiding by OPEC's...
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The implications of Nigeria’s new green bond

Green bonds have been around for a while now, and using them to raise funds for environmental projects is becoming increasingly popular. The bonds were originally created by international development banks including the World Bank, and now Nigeria has become the first country in Africa to issue this kind of financial product. The first tranche of the N150bn Green Bond programme was released in December as Nigeria joined a green bond market that had a projected issuance of around $135bn in 2017. The government sold 10.7 billion naira ($30m)-worth of bonds in the issuance which ran from 18 to 20 December. Fighting climate change "While our nation is not one of the leading generators of greenhouse gases, we are one of the most vulnerable to the effects of climate change," says our Chairman, Onajite Okoloko. "Our agricultural sector - particularly those small-scale operators who make up such a large proportion of our country's farmers - are particularly vulnerable to more unpredictable weather...
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Is increased production the way forward?

Over the last year, Nigerian oil and gas production has finally been on the rise, in the face of a more stable situation in the main oil producing areas of Delta State. The increase has now allowed to us voluntarily join the OPEC-led round of production cuts which were announced in the face of tanking global oil prices, and our country is now limiting our oil output to 1.8 million barrels per day. Overall, the rise in Nigerian production has still had a dampening effect on the global oil price however - despite OPEC's best efforts via production cuts - and this is clearly a big challenge for oil companies looking to make a profit. So is a continued rise in our domestic oil and gas production actually desirable, even if it is now possible given the more stable situation on the ground? A delicate balancing act It's clear that there is an important balance to be struck - one that is fundamentally...
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The importance of cutting gas flares

Gas flaring is the process by which natural gas – a by-product of petroleum – is burned off in the open air, rather than being re-injected underground or collected and sold. It's a controversial and hugely wasteful practice that is also deeply damaging - both to our economy and to the global environment. In many cases operators resort to gas flaring in areas where there has been insufficient funding and investment in the necessary infrastructure to take the excess gas away. "Sadly, gas flaring is still a reality in many parts of our country, and it's important that we make reducing, and ultimately eliminating this practice a real priority,"  says our Chairman, Onajite Okoloko. "Progress has been made in recent years in Nigeria - and the steady decline we're seeing is welcome - but there are still too many operators who are resorting gas flaring as way of avoiding investing in the necessary infrastructure." Still much work to be done In recent years...
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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 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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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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Nigeria targets 15 million new jobs by 2020

Our nation’s Minister of Budget and National Planning, Senator Udoma Udo Udoma, recently announced that our government will aim to reduce national unemployment by creating 15 million jobs by 2020. Under the leadership of our Chairman, Onajite Okoloko, we will assist our authorities in reaching this ambitious target, by creating new job opportunities. Addressing unemployment Unemployment in our country reached 11.19 million in September 2016. At a press conference, Udoma announced that our authorities will address this by facilitating 15 million new jobs in our country by 2020. Most notably our authorities will create new positions in the energy sector which will bring the country’s electricity generation operational capacity up to a minimum of 10 gigawatts by 2020, helping to solve power shortages. Commenting on this announcement, Mr Okoloko said: “We applaud the government’s ambitious goal of creating 15 million new jobs by 2020, as it will ensure that our people can access the opportunities needed to support themselves financially, and raise...
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