Pipeline bombings: BMI forecast oil production rise by 2. 52mnbpd in 2018

Despite the growing pipeline bombings by militants in the Niger Delta region of the country, Business Monitor International, BMI, sees a positive increase in the country’s oil production by 2.52 million barrels per day, b/d, in 2018, up from 2. 31 million, b/d, in 2016. The report attributed the rebound to what it called ‘sanctioned projects’ initiated in the industry.


BMI risk analysis and forecasts, market research on leading industries, and multinational company research is relied upon by corporate bodies, banks, government departments and multilateral organisations in over 125 countries around the world. 

According to the report, while there have been some notable reforms to the Nigeria National Petroleum Corporation, NNPC, there is still a long way to go in order to create a transparent and profitable company that encourages investment and helps Nigeria reach its hydrocarbon potential. For refined products consumption and ethanol, it sees an upward increase to 318.3, 000 barrels per day, b/d in 2016;  324.7-2017; 334.4-2018; 344.4- 2019 and 354.7 in 2020. Also, refined products production, is expected to meet its fortune, as it recorded a leap of 87.6 in 2016, as against 21.4 in 2015.

 It is expected to further increase to 92.0- 2017; 96.6- 2018; 434.5- 2019 and 695.2 in 2020. The report said that anti-flaring initiatives have successfully reduced the percentage of produced gas that is flared from 20 percent in 2013 to half of that in 2015.

 It stated that “increased gas-powered generation in Nigeria should see domestic gas consumption more than double through our forecast period.” 

Additional  power capacity

 It also noted that, “risks lie to the downside: the poor state of transmission and distribution infrastructure, constant gas shortages and low electricity tariffs will continue to represent large hurdles to much-needed investment into additional power capacity and more reliable infrastructure. 

“An expansion of Nigerian liquefied natural gas, LNG, capacity within our forecast period is unlikely, given the unreliable supply-side and an uncertain demand-side. A combination of new LNG projects coming online globally and Nigerian LNG export capacity remaining capped at 30bcm will see Nigeria lose market share in the global LNG market.” However the report is optimistic that LNG exports will increase slightly as the global demand for LNG expands over the next 10 years. Specifically, it stated that “On the exploration front, the current situation is bleak. 

“According to Baker Hughes, the rotary rig count in Nigeria for February 2016 was 6, which is nearly half the average figure for 2015 and well below the average of 15 for 2014. “However, 3D seismic surveys are being conducted in the Lake Chad area with NNPC being positive about a significant oil discovery.” Continuing, the report said it expect total petroleum consumption to increase steadily from an estimated 317, 340b/d in 2016 to about 426, 200b/d by the end of our forecast period 2020. “This is led by the transport sector and the continued use of diesel power generators as backups to intermittent power supplies.

 The recent collapse of oil prices has helped facilitate the removal of subsidies on gasoline, offering relief to the fragile refining sector.”

 Also the report further explained that the financial vulnerability of indigenous companies to continued low oil prices has the potential to slow down the country’s forecasted rise in production over the next three years. It said: “The Nigerian government’s incentives for indigenous companies – coupled by widespread divestments by International Oil Companies, IOCs, – have fuelled the prominence of smaller Nigerian producers. According to the NNPC, these companies make up 10 percent of total production, which is equivalent to 242,000 Barrels per day at 2015 production levels.”