3.750
%
Positive
91
mm boe
51
%
Recent liberalisation of NNPC’s ability to finance its shortfall in cash calls will pave the way for an acceleration in growth, but only full scale liberalisation of O&G will allow its full potential to be achieved. Despite the oft well documented issues with corruption, we continue to believe that it is a positive place to undertake O&G activities, and the recent liberalisation supports our Outlook Positive.
August 25, 2021
Africa - West
mm bbl
bcf
Western Africa, bordering the Gulf of Guinea, between Benin and Cameroon.
Multiple (PSC/Concession)
Since 1993, the fiscal system for foreign investors has been the PSC. However, most of Nigeria’s production, however, is under joint ventures between NNPC and major oil companies under royalty/tax terms. In addition, indigenous producers also operate small amounts of production under slightly different royalty/tax terms. The long awaited Petroleum Industry Bill will radically overhaul the fiscal regime in Nigeria is presently before the Nigerian parliament. There has been strong opposition to the bill by industry players, potentially making a number of projects, particularly gas and deep-water fields, uneconomic.
Nigeria’s economy – Africa’s largest – exited recession in 2017, assisted by the Central Bank of Nigeria’s more rationalized foreign exchange regime. No growth is expected in the near term and although 2019 ended with a real growth rate of 2.3% this is still below Nigeria’s population growth rate of 2.6 percent. Nigeria has a very young population with nearly two-thirds under the age of 25. The Nigerian government has undertaken reforms to help improve the business environment, including making starting a business faster by allowing electronic stamping of registration documents, and making it easier to obtain construction permits, register property, get credit, and pay taxes.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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