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Business opportunities in Nigerian Oil and Gas Industry

Nigeria is a lucrative market any day for any company or person ready to go into oil and gas business. The major factors that make Nigeria a viable business destination are as follows:
*A fairly well developed infrastructure (some sectors requiring intervention especially power generation which is a business opportunity)
*Dynamic banking community
*Relaxed foreign exchange regulations
*Existing Stock Exchange for raising of capital
*Large local market for industrial commodities
*Good accommodation facilities (world class) in major cities
*Fixed and mobile telecommunication systems
*Several private and state owned airlines with daily flights between major cities
*A large community of geoscientists, engineers, computer experts, architects, lawyers, etc.
*A commitment by government to privatisation of state owned companies.
*Existing joint venture opportunities in several projects.
*Young and vibrant population.

Starting Point

For any company or individual ready to do business in Nigerian oil and gas sector, the following are the steps that should be adopted to successfully set up a thriving enterprise

Incorporate the company or its subsidiary with the Corporate Affairs commission (CAC)

Register with the Department of Petroleum Resources (DPR) to obtain the appropriate oil and gas industry service permit for the category of the company is interested in.

Register and be prequalified into the Nigeria Petroleum Exchange (NipeX) database to be eligible to bid for advertised tenders.

The new company may also register with the Nigerian Investment Promotion Council. This will provide a one stop shop for any additional requirements that may be necessary for your business.

Business Opportunities

Nigeria has one of the largest markets in Africa. It also has the potentials to be the fastest growing market on the continent. The oil industry is over 50 years old and well established with clear cut legal backing. Some of these investment opportunities available are highlighted below.

Internal Gas Market Potentials

An internal demand for 360 mmscf of gas daily exists. Most of these will be utilised in independent power generation as well as manufacturing plants designed to utilize. There is also a large market Liquefied Petroleum Gas (LPG).


Gas demands for LNG exports stands at 700 million standard cubic feet per day which are utilised in the two train LNG plants at Bonny. Daily gas consumption has risen to 1.05 billion cubic feet since the third train came on stream in November, 2002. The Trans-West African Gas Pipeline is on-stream and expected to deliver 120 million standard cubic feet of gas per day to the Republics of Benin, Togo and Ghana. These gas utilisation projects will require the construction of a large number of systems for gas gathering within and outside of the oil and gas fields and the distribution system in industrial and residential estates.

Oil Industry Petroleum Products

West Africa is an obvious target for Nigerian manufactured petroleum products. Current installed refining capacity in Nigeria is 445,000 barrels per day, although effective performance is only 50% of the installed capacity. Tremendous opportunities for investment (in the privatisation of Nigeria's refineries and petrochemical plants) therefore exist to meet the demand for petroleum products in both Nigeria and West Africa. There are also opportunities for the establishment of exports oriented refineries, petrochemical and LPG plants.

Support Facilities

Investment opportunities exist in the establishment of manufacturing facilities to produce most of the inputs for oilfield operations e.g. oil well drilling clays, chemical and materials, pipes, bolts and nuts, screw gaskets, valves and other accessories, pans and plastics including other components. Opportunities also exist for engineering construction and contractingcompanies willing to establish locally to boost the Nigerian content in the operations, activities and growth of the oil and gas industry.

Financial Sector

Government has totally divested her interests in both the commercial and merchant banks. The sector is totally open for overseas investment.