Nigeria to lead upcoming oil and gas project starts in Africa
By Ibidunni Banjoko
Nigeria will between 2023 and 2027 top the African continent’s upcoming projects in the oil and gas sector with 89 assets under construction, spanning the upstream, midstream and downstream of the oil and gas sector in Africa, according to a report by data and analytics company, GlobalData.
Africa as a whole is expected to witness 492 projects commencing operations between 2023 and 2027. Of these, upstream projects should total 139, midstream should be the highest with 162, refinery should total 77 and petrochemicals 144.
In the midstream sector, the trunk/transmission pipelines segment alone constitutes 34% of all projects, followed by oil storage and gas processing with 28% and 22% respectively. Refinery and petrochemical projects constitute 39% of all upcoming oil and gas projects in Africa between 2023 and 2027.
New build projects dominate the upcoming projects’ landscape in Africa, constituting 82% of the total across the value chain. The share of new build projects is especially high in the midstream sector, with 38% of the total new build projects. Expansion projects lead in the upstream (fields) sector.
Around 40% of projects in Africa are in the construction and commissioning stages, and these are more likely to commence operations during the outlook period. Another 40% of projects are in the planning stages, and the rest have either been approved or are awaiting approval.
The Dangote refinery in Lagos and Oil Mining Lease (OML) 13 in Akwa Ibom are two major projects that will drive Nigeria’s share of the projects.
The Dangote refinery, which has a capacity of 650 million barrels per day (mbd) and a cost of $16.1 billion, is expected to begin operations this year.
OML 13, on the other hand, has a production capacity of 184,333 barrels of oil equivalent per day (boed) and a project cost of $3.2 billion.
Nigeria has also recently concluded the bidding and award process for about 57 marginal fields, which are expected to begin producing first oil from the end of 2023.
Additionally, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has started the process of concluding a mini-bid round for seven deep offshore open
In Nigeria, fields and refineries are set to lead upcoming project starts, accounting for about 57% of the total project starts between 2023 and 2027.
The midstream sector is also expected to witness substantial project starts, with the oil storage and gas processing segments leading with 12 and 11 projects, respectively.
GlobalData’s Oil and Gas Analyst, Himani Pandey, noted that Nigeria remains critical to oil and gas exploration on the continent, being one of the leading exporters of crude oil in the world.
Nigeria continues to focus on the development of fields to sustain future oil and gas production, as well as the development of refineries and oil storage projects to reduce imports of refined products and boost exports.
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