The nigerian services sector has shown impressive gains amid. Less than 1 per cent of national gdp comes from the downstream oil sector. The nigerian oil and gas outlook looks promising on one side and on the other hand not too good as the government might to take certain step. Fight continues for nigeria oil spill victims, al jazeera, june 8, 2010. This guide provides a general overview of the nigerian power sector and sets out the legal and regulatory framework applicable to the sector.
This study is prompted by fewness of studies on the impact of energy shocks on economic growth of oil exporting countries like nigeria, unlike studies on oil importing countries olomola and adejumo, 2006. The dysfunctional state of nigeria center for global. In 2016, shell, in nigeria, witnessed roughly 700,000 barrels per day being deferred, due to pipeline vandalism. Oct 16, 2018 an introduction to nigerian oil and gas. Political interference in the management of the refineries has created obstacles for the sector and paved the way for persistent undercapacity utilization. In 2019, the federal government of nigeria also mandated cbn to support corporate bodies and individuals that are engaged in production of ten 10 speci. While abubakar has been criticized for graft and corruption during his vicepresidential tenure, its hard to argue against his desire to revitalize nigerias dilapidated oil and gas sector. Nigerias head of state and commanderinchief of the armed forces. Nationalization of the oil sector was also precipitated by nigerias desire to join opec, which was encouraging member states to acquire 51% stakes and become increasingly involved in the oil sector. Thus, nigeria embarked on the liberalisation and privatisation of electricity sector.
Therefore, the oil price fall calls for an inward looking into the. Nigeria is a mono economy, dependent on oil importation and exportation for its survival. Oil extra ction in the niger delta region has caused severe environmental degradation, owing to the legacy of oil spills. Click to download and read more on the kpmgs second edition of the nigerian oil and gas update. This guide provides a general overview of the nigerian power sector and sets out. The oil and gas sector can best be described as the bride of the nigerian economy, thus if. Stakeholders engagement in the oil and gas industry in. Lower oil prices have significantly affected the fiscal and external accounts, decimating government revenues to just. Firmlevel evidence santiago herrera and wilfried kouame key words. Nigeria s oil and gas industry outlook for 2020, a mixture of good and bad. The oil and gas sector accounts for about 10 per cent of gross domestic product, and petroleum exports revenue represents around 86 per cent of total exports revenue. Eghosa osa ekhator abstract nigeria operates a command and control regulatory framework in the oil and gas sector. This is an urge to know the extend to which this sector affects the economic life of the people. This is because the agricultural sector is a major employer of a larger proportion of nigerian population.
Pdf political economy of the petroleum sector in nigeria. These pioneering efforts ended abruptly with the outbreak of the first. The crude oil production in nigeria is estimated to witness a decline of approximately 7. It is also designed to provide information on the regulatory agencies and key institutions in the sector, broad practical guidance on the relevant legislation, fiscal provisions and. The awardwinning documentary, drilling and killing by amy goodman, jeremy scahill and dred scott keyes assassins in foreign lands. The oil and gas sector can best be described as the bride of the nigerian economy, thus if it is well nurtured. For more information, the following are good places to start. Overview of the performance of the nigerian oil and gas.
The views expressed in this report are the authors, and may not. This study is prompted by fewness of studies on the impact of energy shocks on economic growth of oilexporting countries like nigeria, unlike studies on oilimporting countries olomola and adejumo, 2006. Nigeria s leading finance and market intelligence news report. While nigeria s oil industry welcomes chinas interest. There is no doubt that the government is working to achieve the objectives of the 7 big wins agenda. The impact of oil on nigerias economic policy formulation by biodun adedipe, ph. Nigerias oil and gas industry outlook for 2020, a mixture of. Jun 10, 2010 while this site does not have a particular section on nigeria, it is very broad and deep at the same time and can help put something like the struggle for oil, freedom and basic rights in nigeria into perspective with similar struggles throughout history. Nigeria joined the ranks of oil producers in 1958 when its first oil field came on stream producing 5,100 bpd. This thesis argues that certain tax measures in canadas oil and gas industry have considerable potential for addressing certain industry inefficiencies in nigerias petroleum sector. The name petroleum covers both naturally occurring unprocessed crude. Looking beyond oil 9 crude oil production waiting on sector reforms the impact of the low oil price in terms of production has been relatively capped but remains high risk. Nigerian power sector from a state monopoly to a competitive electricity market. This newsletter highlights some of the recent tax and regulatory developments in the sector.
While the nonoil sector accounts for 90 percent of gdp, the oil sector plays a central role in the economy. More problematically, the awarding of oilfield concessions, often on a discretionary basis, was always an important vehicle for graft in the nigeria oil industry. Nigeria has substantially lost income from oil and has to fund the 2016 budget mainly from borrowed funds and perhaps from recovered loot. Introduction this article focuses on the various legislative enactments governing the oil and gas regime in nigeria. Nigeria is diversified in term of ethnicity and religion. The federal government of nigeria fgn has sent a bill to the national assembly that will change the petroleum industry structure. As at 20, nigerias proven oil reserves were estimated by the united states energy information administration eia at between. Pdf purpose this chapter examines the socioeconomic and political challenges facing nigerias oilproducing sector. The stakeholders involved in oil and gas development in nigeria can be categorized as. Adedipe associates limited, victoria island, lagos, nigeria. Nigeria faces a dire future with continued oil dependency. Nigerian oil and gas sector, particularly by oil and gas service companies.
Stakeholders engagement in the oil and gas industry in nigeria. With an abundance of natural resources, it is africas biggest oil exporter, and has the largest natural gas reserves on the continent. Nevertheless, we still celebrate our unity in diversity. However, this will be highly dependent on development and implementation of the right fiscal framework to improve and sustain investments in the sector through the passage of the components of the overdue petroleum industry bill pib. Given that problems of petroleum sector governance are extremely entrenched in nigeria, the key question is whether and how it is possible to get out of a poor. This research is proposed to put into verification, the obvious dominant role of the oil and gas sector in the nigeria economy.
In nigeria, the deepwater sector still has a large avenue to expand and develop. Prior to the 2005 reforms, nigeria, with a population of 165 million people, and an average generation of about 3,800 megawatts mw, had a low per capita consumption. One major concern, however, that prospective investors in the nigerian upstream oil and gas sector have appears to be the uncertainties surrounding whether or when the pib would be passed into law, and in what form it would be passed. Below are the major top 10 problem affecting nigeria oil and gas industry. In this recent time of falling oil prices, the impact is felt on the nigerian economy through inflation, job loss and naira depreciation. Pdf the relatively slow pace of nigerias development has often been attributed to the phenomenon of the resource curse whereby the nature of the. Most of the crude oil in nigeria comes from numerous, small, producing fields, located in the swamps of the niger delta, anambra state, benue state, trough, chad basin, and benin and product is exported through 7 terminals, and a number of floating production vessels. For instance, nigerias development of the oil sector has been good for the country s economy. We expect this cut coupled with fluctuations in oil price and potential supply. The oil price fall and the impact on the nigerian economy.
Mar 08, 2019 while abubakar has been criticized for graft and corruption during his vicepresidential tenure, its hard to argue against his desire to revitalize nigerias dilapidated oil and gas sector. A littleknown fact, even amongst nigerians, is that oil production started in nigeria over 100 years ago, in september 1909 to be precise. The country also has the largest oil and gas reserves in subsaharan africa, with an estimated 37 billion barrels of oil and 188 trillion cubic feet of gas. Nigeria joined the ranks of oil producers in 1958 when its first oil. Nigerian oil and gas industry content development act 2010 no. Agricultural production and economic growth in nigeria. Using nigeria as an example, a 5% growth coming primarily from the oil sector would have much lesser impact on the poverty level compared to the same 5% which comes primarily from the agriculture sector. Oil revenues account for about 95% of nigerias foreign exchange earnings. Thus, this study examined the impact of fallen oil prices. Doing business in nigeria requires that you understand the religion and cultural values of each group. The impact of oil production on the nigerian economy clute journals.
Nigeria is a multiethnic and culturally diverse federation which consists of 36 autonomous states and the federal capital territory. National participation in the nigeria oil and gas industry. A depreciation in the value of the naira from the current level, as we expect, will eliminate the effect of the drop in the crude oil price. Other companies active in nigerias oil and natural gas industry are addax petroleum, statoil, and several. Most of the investment was in the petroleum sector. Africa is a region abundant in natural resources and rich in vast oil reserves. Analyzing the oil and gas sector nigeria is one of africas largest oil and gas producers, with over two million barrels per day in 20166. Nigerias oil sector contributes 15 percent to the gdp and the export values of crude oil now accounts for.
Public regulation of the oil and gas industry in nigeria. Religion is very pronounced in nigeria and it is a very sensitive issue. Nigerias oil and gas industry outlook for 2020, a mixture of good and bad. Nigeria is a major of crude oil and importance or of this commodity. Nigerias oil and gas industry outlook for 2020, a mixture. The upstream oil industry, based in the fertile niger river delta, is the most important economic sector in nigeria.
The discovery was made by shellbp, at the time the sole concessionaire. Nigeria s oil driven economy vulnerable to external shocks the oil production curve continues to slope downward and below the 2 mbpd average target set by the central government opec has lowered nigeria s oil production level to 1. Nigerian mining sector brief 1 nigerian mining sector brief. The paradox of the black gold 343 neither are provisions made for externalities that will produce adverse impacts on the oil bearing communities. Oil and gas production had been hampered in nigeria in the past few years, due to the attack on oil and gas infrastructure by militants. Pdf impact of fallen oil prices on the nigeria economy. Environmental policies and strategies in nigeria oil and. In nigeria, though crude oil has contributed largely to the economy, the revenue has not been properly used. While nigerias oil industry welcomes chinas interest. Shell petroleum development company spdc is the pioneer and leader of the petroleum industry in nigeria. Nigerian oil is light and low in sulphur and consequently commands premium prices.
The amount of oil extracted from nigeria is expected to expand from 15,000 bbld 2,400 md in 2003 to 1. Nationalization of the oil sector was also precipitated by nigeria s desire to join opec, which was encouraging member states to acquire 51% stakes and become increasingly involved in the oil sector. Review of the nigerian oil and gas sector leadership. Is oil in nigeria a growth cure or a resource curse. Nigeria country strategy note august 2016 executive summary nigeria is africas largest oil exporter, and the worlds 11th largest oil producer, accounting for more than 2. Click to download and read more on this newsletter which provides more insights into the nigerian oil. Nigeria s oil and gas industry outlook for 2020, a mixture. Canada is reputed to have one of the best oil and gas tax regimes in the world.
The company began production in 1958 with an average production of 6000 barrels of oil per day bopd. Nigerias heavy dependence on the oil sector and the recent uncertainty in the international oil market have brought mixed economic results. In recent years a number of african economies have seen an accelerated gdp growth rate. Insights from new company disclosures analyzing nigerias oil and gas sector ptg reports provide citizens with unprecedented levels of relevant and timely projectlevel payment data that can be used to inform public debate on the management of nigerias natural resources. History of the nigerian petroleum industry oil was discovered in nigeria in 1956 at oloibiri in the niger delta after half a century of exploration. The nigerian services sector has shown impressive gains.
The impact of oil on nigerias economic policy formulation preamble economic policy is the actionstatement of the government pertaining to particular sectors of the economy, describing the intended objectives and how to achieve them. The paradox of the black gold 343 neither are provisions made for externalities that will produce adverse impacts on the oilbearing communities. It has the largest acreage in the country from which it produces some 39 per cent of the nations oil. Although the nigerian government had maintained involvement in the industry prior to 1971, this was accomplished mainly through business deals on. Nigerias oil and gas revenues natural resource governance.
Labor productivity, total factor productivity, investment climate, corruption, nigeria. In many cases the petroleum industry has played a pivotal role in this growth. This resulted in costing the country revenue of about usd. Nigerias oil sector and the poor may 23, 2003 michael l.