* The report provides a comprehensive overview of the Nigerian Oil & Gas Servicing Industry including the market structure and size of the various segments
* The report examines the market potential for the provision of goods and services to exploration and production companies in Nigeria
* The report outlines the current market, regulatory, structural, financial and technical challenges faced by indigenous operators in the Nigerian Oil & Gas Servicing Industry
* The report provides an overview of the current challenges faced globally by exploration and production companies and the consequent impact on the Oil & Gas Servicing Industry
* The report assesses the competitive landscape, strengths, weaknesses, opportunities and threats as well as the key success factors and major risks inherent in the Industry. A section on Industry Economics takes a detailed look at profitability, cost structure, cash flow, terms of trade, leverage and financing structure.
Questions the report answers
Indigenous oil and gas servicing companies are estimated to account for up to 20% of goods and services the Industry provides to exploration and production companies in the country.
We expect the demand for oil & gas servicing to begin to recover towards in the medium term as crude oil prices remain relatively low and global exploration and production companies divert resources to lower cost producing regions such as Nigeria.
Source of Information
This report is based on information obtained through both primary and secondary research. The primary research included face-to-face and telephone interviews with industry operators and experts. Sources of secondary research include reports from regulators, analysts, associations, print media and third party research papers. We have estimated key demand and financial figures based on our knowledge of the Nigerian Oil & Gas Servicing Industry where we have been unable to get detailed financial information. We believe the estimates derived from the information made available to us provide a good indication of Nigeria’s Oil & Gas Servicing Industry.
We believe the information, analyses and opinions contained in this industry report would prove indispensable to:
* Bankers who wish to assess the credit worthiness of the Industry players
* Analysts, investors and other users of financial information who require a good understanding of the Industry
* Regulators and policy makers seeking to understand contemporary issues in the industry
Overview of the Report
The considerable decline in crude oil prices has put a significant damper on the demand for the goods and services of the Oil & Gas Servicing Industry from major exploration and production projects. International oil companies have put significant investments on hold across the globe due to uncertainty in the market and reduced profitability of operations. The rise in militant activities has also contributed to the reduced activities in the Oil & Gas Servicing Industry with many indigenous upstream companies that have been actively developing assets having to deal with disruptions due to attacks on facilities in addition to the lower crude oil prices.
The Nigerian Oil & Gas Servicing Industry has great potential to develop but this is highly dependent on the development of the country’s oil & gas upstream industry from where demand for servicing is derived. We expect to see the resources of many oil majors diverted from the higher cost crude oil production locations such as the oil sands in Canada and shale in the USA to low cost of crude oil production countries like Nigeria. There will therefore be a marked increase in crude oil exploration and production activities in Nigeria and thus demand for the Oil & Gas Servicing Industry in the medium term.
The contribution of local players in the Oil & Gas Servicing Industry is unlikely to rise considerably higher than the current 20% in the medium term in spite of the support given to indigenous operators by the Local Content Act. Weaknesses such as low technical capacity, relatively small size and limited capital limit the extent to which many can participate in major exploration and production projects. The drop in crude oil prices and re-emergence of militancy in the Niger Delta have contributed to the poor financial condition of a large number of indigenous servicing companies with many reporting losses, facing cash flow constraints and highly leveraged.