2023 Oil & Gas Upstream Industry Report

Overview of the Report

The global oil and gas industry experienced significant disruption in 2022, but despite these challenges, crude oil production continued to rise, driven by increased output from major players such as the US, Canada, Russia, and Saudi Arabia. However, despite having the second-largest proven crude oil reserves in Africa, Nigeria faced significant disruptions that hampered upstream oil and gas operators in the same year. Nigeria’s crude oil production witnessed a decline in 2022, reaching an average of 1.1 million barrels per day (mbpd). This decline can be attributed to the persistent challenges arising from crude theft and vandalism that have plagued the upstream Nigerian oil and gas industry (the Industry). These challenges have not only impacted production but also deterred foreign direct investment (FDI) and delayed final investment decisions (FIDs) for major greenfield projects.

Recognising the need to take decisive measures, the Nigerian government has implemented initiatives, in some cases partnering with adversely affected upstream oil and gas operators to address the issues facing the Industry. These initiatives include establishing a pipeline surveillance program and improving security in the Niger Delta region, where most of the country’s crude oil infrastructure is located. Some operators have also invested in theft-proof pipelines and alternative evacuation channels to mitigate losses from theft, albeit with significant cost implications. The government’s initiatives and Industry responses have started yielding some results, as Nigeria’s crude oil production rose steadily to reach 1.3 mbpd in March 2023. The outlook on production in 2023 is more optimistic compared to the previous year, especially since the Ikike field, Madu field, and Bosi field, amongst others, are expected to contribute to production growth. These developments indicate a potential turnaround in Nigeria’s oil production trajectory.

Although investments in crude oil are dwindling, the country has continued to increase emphasis on developing the gas segment in line with global trends. However, challenges such as weak domestic infrastructure and non-market-based pricing models for major gas consumers, particularly power companies, continue to hinder progress. It is evident that significant progress in the gas sector requires substantial infrastructure improvements and a fully deregulated market to attract more investors.

  • Examines the Industry’s structure, focusing on the various segments and trends
  • Reviews the Industry value chain and dynamics
  • Assesses the competitive landscape
  • Tracks the regulatory and policy environment as well as its impact on the Industry
  • Highlights key trends and developments within the Industry
  • Examines prevalent challenges within the Industry
  • PESTLE Analysis of the Industry
  • Provides insights into the economics of the Industry