Oil and Gas Investment Opportunities In Nigeria
Business Opportunities In The Oil And Gas Sector
in the oil and gas sector, foreign and domestic investors are being encouraged through improved fiscal incentives. In the Upstream and Downstream sectors, the following are some of the areas where there are pressing needs for investors making it a good investment opportunity in the oil and gas sector.
- Upstream Activities
- Petroleum Exploration and Exploitation.
- Manufacturing of consumable materials in exploration such as explosives, detonators, steel castings, magnetic tapes etc.
- Search for development of local substitute for such items as Medium pressure valve, pumps, shallow drilling equipment, drilling mud, bits fittings, drilling cements etc.
- Other areas in the services sector of the upstream are:
1. Construction and Installation
4. Well Services and
5. Transportation Support Services.
- Downstream Activities:
- Domestic Production and marketing of Liquefied Petroleum Gas (LPG)
- Manufacturing of LPG cylinders, valves and regulators, installation of filing plants, Retail distribution and development of simple, flexible and much less expensive gas burner to encourage the use of gas instead of wood and other fuels.
- Establishment of chemical industries such as distillation units for the production of naphtha and other special boiling point solvents used in plant and other food processing industries.
- Establishment of processing plants and industries for:– The production of refined mineral oil, petroleum jelly and grease.– The manufacture of bituminous-based water/damp-proof building materials such as roofing sheets, floor tiles, rubber products, tarpaulin. Building of asphalt storage, packaging and blending plants to handle the product for export.
- Development of Phase II (Phase III to join later) of Nigeria Petrochemical Programmed.
- Establishment of industries for processing Linear Alkyl Benzene, Carbon Black and Polypropylene.
- Participation in all phases of the Nigeria Gas Industry development programmed from exploration, gathering, production and processing to transmission.
- Establishment of small scale industries to produce chemicals and Solvents, for example Chlorinated methane, Formaldehyde, Acetylene, etc., from natural gas.
- Refining: One condition for purchasing Nigerian Crude Oil is the ownership of an efficient refinery to refine the crude. The shelter which the domestic petroleum products market enjoys, almost completely seals the prospects and viability of privately financed refinery for locally consumed petroleum products. However, business opportunities exist for the construction of a petroleum refinery in bonded environment with adequate export facilities for dedication to the petroleum export market. Companies in Nigeria with the technological know-how can undertake turn-around maintenance of refineries. Refineries consume a lot of chemicals and utilize a broad range of spare parts. There is tremendous scope for small scale joint venture manufacturing concerns with foreign technical partners. Such ventures can start warehousing arrangements that will ensure continuous supply at competitive prices in the market. Other investment opportunities in the oil and gas sector is contingent upon refining and ancillary activities that manufacture of special products such as:- Insecticides
– Industrial and food grade solvents
– Mineral Oil, petroleum jelly grease
– Asphalt storage, packaging and blending plants to handle products for export and local use. Export of refined products surplus also exists as an opportunity in refining.
– Bituminous-based water/damp-proof building materials such as floor tiles, rubber products, tarpaulin, etc., and
- Products Marketing: Petroleum Product Marketing as an investment opportunity in the oil and gas sector would seem sealed with hardly any opportunity except by way of establishing an independent marketing outfit or aspiring to establish dealership with the marketers.
While indeed those investment opportunities remain viable, far more challenging opportunities may be explored in the areas of product transportation, by road and coastal tankers.
Associated with products distribution and marketing is a chain of manufacturing and maintenance business such as lubricating oil reprocessing, LPG bottles and accessories, oil cans reconditioning, etc. in the part 2 of this article, we will talk more about all this.
The nations pipeline and depot network consists of 3,001km of pipeline of varying sizes as well as sixteen (16) storage depots. These pipelines and networks traverse the length and breathe of the country. The petroleum system therefore; must be maintained in a healthy state for effective and efficient distribution of products within and outside the country.