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Market Overview

Nigeria is the largest producer of oil and gas in Africa with a daily capacity of more than 2.5 million barrels per day and oil reserves of about 37 billion barrels

The oil and gas sector is one of the most important sectors in the Nigerian economy, accounting for the bulk of exports and Federal Government’s revenue. There are many hydrocarbon basins in Nigeria, though the focus of exploration has remained on the Niger Delta basin (South of Nigeria) which is one of the most prolific hydrocarbon basins in Africa. These oil and gas assets are typically found in small deposits located in over 250 onshore and offshore acreage

Well-known Worldwide

Nigeria’s hydrocarbon is well-known worldwide, as its crude oil is classified as light-sweet crude oil blend due to its low level of sulphur content and low specific gravity (High API gravity) which is a preferred feedstock for gasoline. The blends have low values of viscosity, therefore can be transported easily. Hence, producing Nigeria’s hydrocarbon is economic and relatively safer as compared to other blends. As a result, it typically trades at a premium to the price of Brent crude. Grades of Nigerian crude oil include Qua Iboe, Brass River, and Forcados. The Bonny Light is in high demand specifically by American and European refineries.

Exploration & Production

Since 2009, the Nigerian Petroleum Development Company Limited has acquired an increasing share of the National Oil Company, NNPC’s, portfolio following divestments by the international oil Companies. Indigenous oil and gas companies are the government’s strategy to building local capacity with the ultimate aim of limiting the outflow of the Country’s oil revenue to other parts of the world. Nigeria is the only country in Sub-Saharan Africa with a home-grown exploration & production industry and a generally strong skill base.

Environmental Sustainability

There is growing transition globally to a low carbon world, with rising adoption of alternative energy sources as a result of environmental sustainability concerns. Domestic consumption of gas across Sub-Saharan Africa is currently constrained by limited domestic production and a lack of necessary infrastructure to transport gas, coupled with the ineffective utilisation of natural gas at a large enough scale by power utilities and industries for power generation. As barriers diminish in the medium to long term, it is expected that local consumption of gas in Sub-Saharan Africa will grow significantly.


Domestic gas production is expected to increase substantially in the coming years. Given Nigeria’s huge gas reserves and its advantage as a clean fuel, gas has already witnessed a massive surge in its domestic consumption in recent years. Gas production is fast becoming a major focus in response to strong investment in gas-to-power projects, across the region.

Nigerian Gas Master Plan

OML 26 holds approximately 1-2TCF of gas resources, and thus provides FHN with considerable upside for future value in addition to positioning Nigeria as a regional hub for gas-based industries.


The Nigerian government approved the Nigerian Gas Master Plan as part of its determination to become a major player in the international gas market and lay a solid framework for infrastructure expansion within the domestic market. Through this plan, strategies have been implemented such as the seven Critical Gas Development Projects (7CGDP) to leverage the full potential of gas.

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