By Roseline Okere
THE 2010 oil and gas market research report by Companiessandmarkets.com has shown that the Nigeria petroleum industry would account for 11.92 per cent of African regional oil demand by 2014, while providing 22.72 per cent of supply.
African regional oil use of 2.93 million barrels per day (bpd) in 2001 rose to an estimated 3.57 million b/d in 2009.
The report, which was obtained from the company's website by The Guardian, added that Nigeria's oil and gas production would rise from an average 3.63 million b/d in 2010 and then to around 4.08 million bpd by 2014.
It explained: "Regional oil production was 7.77 million b/d in 2001, and in 2009 averaged an estimated 9.64 million b/d. It is set to rise to 11.83 million b/d by 2014. Oil exports are growing steadily, because demand growth is lagging behind the pace of supply expansion. In 2001, the region was exporting an average 4.83 million b/d. This total had risen to an estimated 6.07 million b/d in 2009 and is forecast to reach 7.75 million bpd by 2014.
In terms of natural gas, in 2009 Africa consumed an estimated 123bn cubic metres (bcm), with demand of 194bcm targeted for 2014. Production of an estimated 248bcm in 2009 should reach 385bcm in 2014, which implies net exports rising from 125bcm in 2009 to 191bcm by the end of the period. In 2009 Nigeria consumed an estimated 14.65 per cent of the region's gas, with its market share forecast at 27.34 per cent by 2014. It contributed 18.18 per cent to estimated 2009 regional gas production and, by 2014, will account for 21.04 per cent of supply.
For 2009 as a whole, the report has assumed an average OPEC basket price of US$60.70 per barrel (bbl), a 35.5 per cent decline year-on-year basis. "For 2010, we expect to see a significant oil price recovery to US$83.00/bbl for the OPEC basket price, gaining further ground to US$85.00 in 2011 and US$90.00/bbl in 2012 and beyond.
"In 2010, we are now forecasting premium unleaded gasoline prices at an average US$97.00, up from US$70.22/bbl in 2009. We are assuming an average global jet fuel price for 2010 of US$97.58/bbl, compared with US$70.63 in 2009. For gasoil, the 2010 price estimate is for an average of US$97.40/bbl, compared with US$70.50 in 2009. The 2010 naphtha price average, estimated at US$81.58/bbl compares with US$59.07 in 2009", it added.
It assumed average yearly growth of 7.0 per cent in 2010-2014 for Nigeria Gross Domestic Product (GDP). "We expect oil demand to rise from an estimated 376,000b/d in 2009 to 493,000b/d in 2014, representing up to 3 per cent -5 per cent yearly growth", it stated.
Concerning Nigerian National Petroleum Corporation (NNPC), the report hinted that it accounts for more than 50 per cent of oil production and over 40 per cent of gas supply, but has a large number of international oil company (IOC) partners contributing to a forecast rise in oil and liquids production from an estimated 1.99 million b/d in 2009 to 2.70 million b/d by 2014, subject to rebel attacks on infrastructure and OPEC quota policy.
Gas production, according to the report is expected to reach 81bcm by 2014, up from an estimated 45bcm in 2009.
"Consumption is also anticipated to rise dramatically from around 18bcm to 53bcm by the end of the forecast period, allowing exports of no more than 28bcm. This threatens the country's Liquefied Natural Gas (LNG) export business unless fresh supplies can be located and developed.
"Between 2009 and 2019 we forecast an increase in Nigerian oil and gas liquids production of 71.3 per cent, with volumes rising steadily to 3.40mn b/d by the end of the 10-year forecast period. Oil consumption is set to increase by 88.4 per cent, with growth slowing to an assumed 7.5 per cent per annum towards the end of the period and the country using 708,000b/d by 2019", it added.
It disclosed that gas production is expected to rise to 125bcm by the end of the period, with demand rising by 288.9 per cent between 2009 and 2019, export potential should increase to 55bcm, largely in the form of LNG.
The report shows that Nigeria now shares third place in our updated Upstream Business Environment Ratings, alongside Angola and Algeria.
It added that Nigeria may struggle to keep up with Angola over the short term, as its West African neighbour has greater potential for advancement. Nigeria's score benefits from its substantial oil and gas reserves, its oil and gas production growth outlook, and high reserves-to-production ratios (RPR).
"The competitive landscape features numerous non-state companies, while licensing terms are generally acceptable, although potentially under review. However, negative country risk factors undermine the hydrocarbons-specific strength. The country is in the upper half of the league table in our Downstream Business Environment rating, with a few high scores but near-term progress further up the rankings deemed unlikely. It is ranked fourth behind Algeria, thanks largely to poor country risk factors that undermine further a regulated and largely state-controlled industry. Algeria is four points above it in the regional rankings and looks set to stay out of reach. Angola just one point below represents a medium term threat", it stated.
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