Nigeria to Dominate Africa’s Oil and Gas Projects Between 2023 and 2027

According to a report by data and analytics company, GlobalData, Nigeria is set to dominate the oil and gas sector in Africa between 2023 and 2027.

The report shows that Nigeria will lead the continent’s upcoming projects in the sector, with 89 assets under construction spanning the upstream, midstream, and downstream. Out of the 492 oil and gas projects expected to commence operations in Africa during this period, Nigeria will account for the largest share.

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 blocks that will likely boost Nigeria’s oil and gas reserves.

The GlobalData report indicates that of the projects expected in Africa, upstream projects would total 139, midstream 162, refineries 77, and petrochemicals 144.

The trunk/transmission pipelines segment alone constitutes 34% of all midstream 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 while expansion projects lead in the upstream (fields) sector.

About 40% of projects in Africa are in the construction and commissioning stages, and are more likely to commence operations during the outlook period.

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.