Nigeria is preparing its economy for a post-oil era

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Nigeria has launched plans to implement efforts to prepare its economy for a post-oil world.

According to the Minister of Science and Technology, Africa’s largest oil producer Ogbonnaya Onu, Nigeria is seeking to introduce methanol into the economy.

The minister who spoke at a forum this week said the move would reduce gas flaring by using natural gas as a feedstock for methanol production.

Nigeria’s oil and gas sector accounts for around 10 percent of gross domestic product (GDP), according to OPEC estimates.

Nigeria’s revenues from petroleum exports represent about 86 percent of the country’s total export revenues.

Nigeria does not intend to abandon oil and gas exploration or stop trying to attract investment in its most important source of income, despite the shocking report by the International Agency energy (IEA), which suggested last week that no new investment in oil and gas is needed if the world is to get on the path to net zero emissions by 2050.

Just this week, the Nigerian National Petroleum Corporation (NNPC) signed an agreement with international oil majors Shell, Exxon, Total and Eni to develop an offshore oil block that includes the Bonga deep water field.

The deal marks a historic moment as it settles long-standing disputes between the Nigerian government and international oil companies, the NNPC noted.

Despite declining long-term oil demand forecasts, Nigeria has serious ambitions in expanding its oil industry.

More than 100 oil and gas projects are expected to be launched over the next five years in Africa’s largest oil producer. The Bonga field is one of the 25 upstream projects and is expected to start commercial production in 2025.

According to data from analytics firm GlobalData, this will represent 23% of total oil and gas projects starting in Africa over the next five years.

Of these 100 projects, petrochemicals will represent the largest individual share with 28 projects, followed by upstream with 25 projects, refining with 24 projects and midway with 23 projects.

Advancing Nigeria’s refining sector is a high priority on the national agenda as the country is keen to reduce its dependence on imports. The 650,000 barrels-per-day Lagos 1 project – scheduled to begin operations in 2022 – could become Africa’s largest oil refinery when completed.

The projects also have the potential to transform Nigeria into an exporter of refined products to neighboring countries.

In the petrochemical sector, the Brass Fertilizer & Petrochemical Company methanol plant is another key project, offering a capacity of 1.7 million tonnes per year (mtpa). The project has already been approved and is expected to begin operations by 2025.

Notable upstream projects include the Bonga North deepwater oil field, as well as the development of the Okpokunou onshore conventional gas cluster. Bonga North, currently in its front-end engineering design phase, is expected to begin operations by 2025. Development of the cluster, which is at its feasibility stage, is expected to start by 2024.

By 2025, intermediate projects will account for around 23% of all oil and gas projects in this West African country. Gas processing will account for approximately 29% of total intermediate developments, with the ANOH gas processing plant representing one of the key projects in the sector, with a capacity of 300 million cubic feet per day.

In the LNG sector, the $ 7 billion Nigeria LNG expansion project has been approved and is expected to start operations in 2025 and will increase annual LNG production capacity to over 30 mtpy from the current 22.5 mtpa .

Last October, Mele Kolo Kyari, group chief executive of the Nigerian National Petroleum Corporation, said Nigeria plans to end its crude-for-fuel swap deals when its refining capacity increases. As a result, the sector is expected to be completely redesigned and operational by 2023.

Nigeria’s post to prepare its economy for a post-oil era first appeared on The Exchange.

REUTERS



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