Oil and Gas Nigeria’s Powerhouse The country seeks to increase its production and become a fuel exporter in the foreseeable future.
NIGERIA
NEXT LEVEL
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Petroleum was officially discovered in Nigeria for the first time over sixty years ago. In 1956, five decades of exploration finally yielded fruit when Shell D’Arcy (today Shell Petroleum Development Company of Nigeria) at last found the country’s first commercially viable oilfield in Oloibiri, a small community located in modern Bayelsa State, in the Niger Delta region, about 70 km from Port Harcourt. Within a couple of years, Nigeria joined the ranks of oil producing countries: in 1958, the oilfield came on stream, producing 5,100 bps. Oil exportation changed the course of Nigerian history: by the late 1960s and early 1970s, Nigeria produced over 2 million barrels of crude oil per day, a figure eventually topped in the early 2000s, when production peaked at the record level of 2.5 million bpd. Despite the many fluctuations that characterised the oil market in recent years, petroleum production and export still account for a major share of Nigeria’s gross earnings: in the first quarter of 2018, sales of crude oil made up 76.3% of Nigeria’s export earnings, bringing in about US$11.7 billion. In the same time span, processed oil products (e.g. condensates and lubricants) earned an additional US$1.75 billion, i.e. 11.4% of the total export
earnings. In 2018, the increase of oil prices supported the economic growth of Nigeria, and new investments keep being launched to make sure the oil and gas industry can keep sustaining further growth in forthcoming years. Until 2019, the four major existing refineries of Nigeria were the two Port Harcourt refineries, with a combined capacity of 210,000 barrels per stream day; the Warri Refining and Petrochemical Company, with a capacity of 125,000 bpsd; the Kaduna Refining and Petrochemical Company, with a capacity of 110,000 bpsd. Further efforts have been made, and in the next few years, two major sites will reach their peak production rate, providing a further combined increase of 450,000 bpd: the Dangote Refinery and the Egina oilfield. Located in Lekki, not far from Lagos, and fully owned by the homonymous Nigerian company, the US$9 billion Dangote Refinery will be the largest oil refinery in Africa. Once operational, by the end of 2020, the Dangote plant will have an expected refining capacity of 10.4 million tonnes of gasoline per year, contributing to double Nigeria’s overall capacity and sustaining the country’s transition from fuel importer to fuel exporter.
