investment opportunity in oil and gas sector
Petroleum and Gas Reserves
The proven Nigerian oil reserves are 23 Billion barrels; the gas reserves are 160 Trillion cubic meters.
Petroleum And Gas Policy
Objectives
The country has put in place a Petroleum and Gas policy with the following objectives:
- Increasing oil reserve base and productivity through vigorous exploration and ensuring judicious exploitation of the resource.
- Allowing for private sector participation in all the facets of the industry through attractive fiscal measures. Government is giving serious consideration to selling its equity shares in joint venture operation.
- Acquiring reasonable market shares for the crude oil and its derivatives and achieve-ment of domestic refining self-sufficiency.
- Expanding the utilisation of natural gas.
Virtually every sector is open to investors in the Oil and Gas Industry. They include:
- Up-stream Sector;
- Down-stream Sector;
- Gas Development and Conversion; and
- Marketing of Nigeria crude oil.
The Upstream Sector
Activities under the upstream sector include:
Surveying: Geodetic control establishment; Mapping - Tropical and planimetric; and Sea Bottom Survey/Investigation.
Civil Works: Site Surveys; Preparation of drilling locations; Construction of mud pits and slabbing or concreting jobs at rig sites. Supplies of cement, chemicals, sands, gravel, iron rods, labour,roadmat, timber, etc.
Seismic Data Acquisition and Interpretation: Analysis and interpretation of data acquired from seismic and geodetic surveys - such data on soil land rock samples.
Geological Activities: Wireline, logging, core analysis, geological and geochemical studies.
Drilling Operations: Drilling and work-over rigs; field transportation and equipment for haulage and rig movements; general and specialised service such as casing running, cementation, welding, diving and catering; and provision of mud and other chemicals.
Crude Oil Transportation & Storage: Construc-tion and maintenance of crude oil storage tanks and pipelines.
Exploration and Production: Investors wishing to participate in this venture are welcome. This involves applying for block(s) for exploration through the oil prospecting licence (OPL) and the oil mining lease (OML). Currently, emphasis is shifting from production sharing contract (PSC) to Service Contract.
Pursuant to the above, the Oil Exploration Licence (OEL) confers on the licensee, non-exclusive right to explore and investigate by surface geological and geophysical methods within an area of about 12,944.4sq. km; for an initial period of one year, renewable on expiration. The oil prospecting licensee (OPL) confers upon the licensee the exclusive rights of surface and subsurface exploration for petroleum in an area not more than 2,588.8 sq. km. for an initial period of three years, renewable for two years and for PSC, a period of 10 years. If a commercial discovery of hydrocarbon is made, then the licensee is eligible to apply for conversion of not more than half of the area into an oil mining lease (OML). The OML confers on the holder exclusive rights to explore, win, produce and transport petroleum for the delineated area. The maximum duration of lease is 20 years, renewable for another 20 years on expiration.
The Down-Stream Sector
Refining
- Investors can set up and wholly own a refinery;
- Companies with the technological know-how can undertake turn-around main-tenance of refineries;
- There is tremendous scope for small scale joint venture manufacture of spare parts, chemicals with technical foreign partners;
- Also opportunities exist in the manufacture of other special products such as:
(a) industrial and food grade solvents;
(b) insecticides;
(c) cosmetics;
(d) mineral oil, petroleum jelly greases;
(e) bituminous-based water/damp proof building materials such as floor tiles, rubber products, tarpaulin, etc;
(f) exports of refined products surplus;
(g) asphalt storage, packaging and blending plants to handle products for export and local use.
Petrochemicals
- A three phased petrochemical development plan is in place. The first phase is already in place producing:
- linear alkyl-benzene, carbon black and polypropylene;
- Carbon black, used for manufacture of tyres, rubber products, pigments, printing inks,
polish, etc;
- Linear alkyl-benzene, used as an active agent in the production of detergents and shampoos;
- Polypropylene, used as a raw material in the manufacture of injection moulding, fibres extrusion, shipping sacks,prayer mats, carpet underlay and cloth wrap;
- The second phase, an olefin based complex has been commissioned; and
- investors can engage in products fabrication.
Gas Development and Conversion
Government has opened the sector to foreign investment and is willing to consider appropriate tailor-made incentives for projects in this sector. Opportunities which abound in this sector for investors include:-
Natural Gas Pipeline Network
Plans are afoot to build and extend gas pipelines in view of the importance of gas. Investors wishing to set up energy intensive industries such as cement factories, iron smelting and foundries will have a significant cost saving if gas is used as fuel.
The Liquified Natural Gas Project (LNG)
This project, a two-train plant, is aimed at diversifying the petroleum sector. The plant is expected to yield about seven billion cubic meters of gas per annum. The second phase of the project will consist of an additional three-train plant. Therefore, there is room for investors wishing to participate by acquiring shares. Also, the LNG project provides business opportunities for pipe-laying, pipe coating, inspection of numerous related activities, maritime operations and civil works.
The Butanisation Project
Here private sector investment is needed to acquire rolling stocks for bulk LPG (liquified petroleum gas) transport. Investors can also engage in the construction of storage and filling facilities and provision of accessories - valve regulators, filling head, and ‘pig tail’. In addition, ample opportunities exist in cylinder manufacturing, installation of filling plants and retail distribution.
Fertilizer Plants
With abundant natural gas and a teeming population of peasant farmers, enterprises of fertilizer plants will be viable ventures. Investors are welcome to complement the existing fertilizer plants in the country (which hardly meet domestic demand) and boost export trade.
Vehicular Fuel
Entrepreneurs can invest in this highly untapped venture, especially with the current shift of emphasis to gas worldwide. Opportunities exist in Compressed Natural Gas (CNG) cylinder manufacturing and CNG filling stations.
Methanol/MTBE Plants
Currently, plans are being made to construct a methanol plant which is expected to provide 2,500 tons/day at a cost of $442 million. It is a joint venture between the NNPC (60%), Nigerian investors (11%), a consortium of Penspen Group KTI Mannesmann and Berge (15%). The remaining 14% have not been allocated. Interested foreign companies are welcome to take up the remaining equity.
Mobil has initiated an independent power plant (IPP) to be sited at Bonny to generate electricity from associated gas which they will sell to National Electric Power Authority (NEPA). Other investors may consider similar investment.
No comments:
Post a Comment