With proven oil reserves exceeding 9 billion tons, Nigeria is one of the largest hydrocarbon feedstock producers in Africa, and ranks twelfth place worldwide. Nigeria is a member of OPEC, the Organisation of Petroleum Exporting Countries. Natural gas reserves account for 5.2 trillion cubic metres, making it the world’s seventh biggest resource. The country relies heavily on its petroleum industry for economic growth – the sector accounts for about 80% of government revenues and provides 95% of foreign exchange.
Oil was first discovered in Nigeria in the 1950s, and the company most identified with the country’s petroleum industry is Shell. SPDC, Shell’s joint venture with the Nigeria National Petroleum Corporation (NNPC), accounts for around half of Nigeria’s total oil production. Other oil majors present in the country include Total, Elf, ExxonMobil, ConocoPhillips, Chevron and Eni. In 2010, Nigeria was producing around 2 million barrels of oil a day.
Nigeria’s gas reserves are more than three times greater than its oil reserves, and the government is committed to increasing gas production for domestic supply as well as for export. The Trans-Saharan Gas Pipeline currently in development will enable Nigeria to supply the continent of Europe with gas. The country’s contribution to international liquid natural gas supply is large – Nigeria provides 10% of the world’s LNG.
Despite its preeminent role in global oil production, the country’s domestic power supply is under-developed, and shortages of electricity have hampered industrial growth. The government is working to capitalise on its thriving petroleum sector to drive economic growth, while at the same time seeking to leverage its natural resources to ensure sufficient energy supply at home – since there can be no doubt that addressing the power supply problem remains the key stimulus needed to jump-start the country’s economy if it is to be one of the top 20 economies of the world as envisioned in the 2020 blueprint.