By Adedapo Adesanya
Nigeria will maintain its position as one of Africa’s top crude oil producers as well as one of the continent’s top three gas suppliers between 2022 and 2025, according to the African Chamber’s first quarter 2022 outlook. energy (AEC).
He also said it will provide an opportunity for the West African country to leverage its energy resources for economic growth while meeting global energy demand.
Nigeria is one of Africa’s heavyweights in hydrocarbon exploration and production with more than 36 billion barrels of oil and 200 trillion cubic feet of natural gas, the country has managed to position itself both as an attractive upstream market and a competitive producer.
According to the outlook, Nigeria will produce 1.46 million barrels per day of crude oil out of the 6.35 million barrels per day that Africa as a whole will produce during the year, reaffirming the country’s position as a as a continental energy hub as production in the West African state peaks in 2023.
Of the 36 billion barrels of oil reserves Nigeria holds, just over 25% is currently produced from deep-sea projects, underscoring a huge opportunity for Nigeria to expand partnerships and investments to increase production and increase its role in continental and global energy. countryside.
Speaking on the matter, Mr. NJ Ayuk, Executive Chairman of AEC, said: “The recent $1.2 billion deal between Seplat Energy of Nigeria and US energy company ExxonMobil, in which the multinational will pursue its deepwater projects while divesting onshore projects, is an indication of the huge potential for the country’s offshore projects in the near future to meet energy needs as energy consumption increases.
“By placing greater emphasis on these projects, accelerating exploration and production in key basins, Nigeria has the ability to unleash its full energy potential.”
The chamber also called for more investment in the country’s downstream sector with inadequate infrastructure that is slowing oil production and increasing Nigeria’s reliance on fuel imports.
Nigeria imports up to 1.25 million metric tons of gasoline per month due to insufficient domestic refining capacity.
As a result, the $12 billion Dangote refinery project in Lagos, which is expected to start operations in the fourth quarter of 2022 with a processing capacity of 540,000 barrels per day and partly owned by state-owned Nigerian National. Petroleum Corporation, is an example of Nigeria’s drive to establish itself as an oil heavyweight while expanding its oil and gas capabilities to meet national, regional and global energy needs.
Meanwhile, on the gas front, the AEC outlook shows that Nigeria has also retained its place among Africa’s top gas producers in 2022. An annual production capacity of 1.45 trillion cubic feet is expected as the country recovers from the low production levels of 2020.
Existing gas production fields, as well as those under development, are expected to support the country’s gas production until 2025.
Despite factors such as infrastructure vandalism that limit the optimal export of gas and oil, and the high costs and emission rates associated with deepwater projects that drive majors to diversify their portfolios, greenfield investments in Nigeria and its African counterparts will increase investment spending. across the continent to $30 billion in 2022, providing an opportunity for new projects to come online and for major hydrocarbon producers such as Nigeria to upgrade and build new infrastructure as well as expand the exploration and production.
On the regulatory front, the implementation of the Petroleum Industry (PIB) Bill in 2021 by the Nigerian government will provide regulatory clarity on royalties and other issues that have previously made it difficult for oil companies E&P and gas companies and downstream market players to increase investment within the country’s market.
Now, with the implementation of GDP, the Chamber said Nigeria is better placed, now more than ever, to attract investment and accelerate development in 2022 and beyond.
The AEC reiterated that Nigeria is well positioned to lead African investment with proven oil and gas reserves as well as a reformed regulatory landscape making the sector increasingly attractive to foreign capital.