Nigerian Local Companies Drive New Growth Phase in Oil Sector
Nigeria’s oil and gas landscape is experiencing a significant transformation as local companies expand their roles, driving a new phase of potential sectoral growth and innovation that could reshape the country’s energy future.
Companies that acquired onshore and shallow water assets from divesting oil majors are leading the charge, planning billions of dollars in investments to develop previously abandoned fields. These local players now account for over half of Nigeria’s oil production, up from around 40% before the oil majors completed their divestment programs.
Renaissance Africa Energy, after acquiring Shell’s onshore assets, has committed to investing $15 billion over the next five years in its oil and gas operations. The company aims to balance its portfolio by increasing crude oil production while doubling gas output once a key local gas pipeline is completed.
Similarly, Seplat Energy, following its acquisition of ExxonMobil’s Nigerian shallow-water assets, announced plans to reopen 400 previously shut-in wells. CEO Roger Brown revealed the company is set to invest up to $320 million this year in drilling campaigns and infrastructure, targeting crude production of around 140,000 barrels per day.
Conoil Producing recently achieved another milestone by shipping the first cargo of its new Obodo crude blend from the onshore OML 150 in the Niger Delta, with the cargo lifted by Oando Trading.
However, these operators face significant challenges including higher costs due to security issues, community disputes, oil theft, and aging infrastructure. “A key aspect of reducing costs for operators will be addressing these challenges,” noted Mikolah Judson, an analyst at global risk consultancy Control Risk.
Source: bairdmaritime.com