Nigeria - Country Commercial Guide
Oil, Gas, and Mining Sectors

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-10-13


Unit: USD Millions





2021 (estimated) Q1 (Jan – Mar)

Total Local Production





Total Exports





Total Imports





Imports from the U.S.





Total Market Size





Exchange Rate: 1 USD






Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources:

Total Local Production: Independent Power Producers and other local sources such as Manufacturers Association of Nigeria, National Bureau of Statistics.

Total Exports: Independent Power Producers and other local sources such as Manufacturers Association of Nigeria.

Total Imports: Independent Power Producers and other local sources such as Manufacturers Association of Nigeria.

Imports from U.S.: U.S. Census Bureau, ITC Trade Map

Estimation for 2021 were made based on estimated GDP trends across the sector

In June 2020, the government of Nigeria (GON) initiated an Economic Sustainability Plan (ESP) aimed at providing a stimulus of 2.3 trillion naira ($5.9 billion), to support the economy following disruptions and adverse impact of COVID-19 and low oil prices. GON plans to fund the ESP through Special Accounts (500 billion naira/$1.21B), CBN structured lending (1.1 trillion naira/$2.67B) and other funding sources (302.9 billion naira/$736M).

In December 2020, the GON passed a $32.8 billion (13.5 trillion naira) 2021 budget premised on a crude oil production levels of $40, exchange rate of 379 naira to the dollar, and GDP growth rate of 3%. An additional supplementary budget of $2.39 billion (982.72 billion naira) was passed in July 2021 to fight rising insecurity and obtain COVID-19 vaccines. In line with OPEC’s directives, Nigeria recorded average daily oil production of 1.56 million barrels per day (bpd), although the country exceeded this level in May 2021 raising production to 1.6 million bpd

Nigeria remains one of Africa’s key oil producers producing high-value, low-sulphur content crude oil.  Although the country is currently struggling to cope with depleting revenues, liquidity and convertibility issues, supply chain disruption, and impacts of COVID-19, it is vigorously adopting measures to overcome economic downturn and exploring various alternative revenue sources, especially through natural gas commercialization and infrastructure development.

Although the industry saw delays of many projects in 2020, several are beginning to gradually resume, including Shell’s Assa North/Ohaji South Gas Project (ANOH).  The project secured necessary financing to complete construction of its proposed gas plant expected to process wet gas from unitized Assa North-Ohaji South onshore gas and condensate field.  Phase 1 of the ANOH gas plant and upstream development is scheduled to be completed by fourth quarter 2021. In May 2021, the GON through the national oil company, the Nigerian National Petroleum Corporation (NNPC) signed a new production sharing contract (PSC) with its partners on the $16 billion Shell led Bonga South West Aparo Oil Project which sent out invitation to tender in 2019. The new PSC will run for 20 years.

Industry observers hope that the passage of the Petroleum Industry Bill (PIB) in July 2021, will further resolve certain issues associated with amended PSC, enabling several projects.  Some pay reach final investment decision (FID), including Total’s Preowei, Eni’s Zabazaba-Etan, Chevron’s Nsiko, ExxonMobil’s Bosi and Uge. Industry observers see great opportunities in service contracts for these ongoing and upcoming deep-water projects, which are expected to offer substantial ancillary service for drilling and production systems as soon as the economy is reopened.

GON is continuing its prioritization of gas and gas-based infrastructure development in the country, moving ahead on the Nigerian Gas Flare Commercialization Program (NGFCP) policy.  This offers investor opportunities for gas infrastructure and development equipment and services. In June 2021, GON joined the Nigerian LNG Limited at a ceremony to mark the start of the construction of the $10 billion Train 7.  The project is expected to produce 8-30 million tons per annum (mpta) of liquefied natural gas. In March 2020, the project reached FID and awarded front-end engineering design (FEED). The engineering, procurement, and construction (EPC) contracts were signed with the SCD JV Consortium, comprising affiliates of Saipem, Chiyoda. and Daewoo. The EPC triggers the commencement of the detail, design, and construction phase of the project. This creates opportunities for:

  • gas infrastructure development;
  • gas technologies;
  • dredging;
  • fabrication and procurement of liquefied natural gas (LNG) vessels, storage tanks, transmission pipelines, gas equipment, and terminals;
  • and supply of ancillary engineering and construction services. 

In July 2021, GON declared it was seeking over $1 billion funding to continue the $2.8 billion 614-kilometer Ajaokuta-Kaduna-Kano (AKK) gas pipeline. The project was inaugurated in July 2020 as one of the nation’s biggest domestic gas transmission infrastructure to supply gas to Europe through the proposed Trans Sahara Gas Pipeline (TSGP) and Nigeria Morocco Gas Pipelines. Sources indicate that the government is negotiating with Chinese lenders to cover $1.8 billion of project cost following delays in disbursement of earlier pledged funds. EPC contract for the pipeline was signed in April 2018. 

In May 2021, NNPC awarded 57 marginal fields to 161 successful bidders following a bid process that commence in May 2020. These marginal fields are located on land, swamp, and shallow offshore terrains. With these awards, successful bidders and their technical and financial partners can jointly develop the fields. It is of note that international investors may have direct and indirect participation through services or technical assistance contracts from technology providers or under capital injections from funds or private equity investors. Marginal fields are oil fields that the International oil companies abandoned because of limited commercial potential, but which provides opportunities for local players to gain oil exploration experience. Marginal fields in Nigeria have an average economic life of between 8 and 15 years and can produce between 4,000 barrels of oil equivalent (boepd) to 30,000 boepd per field. About nine marginal fields are currently producing.

After more than 10 years of delay, the Nigerian National Assembly in July 2021 finally passed the Petroleum Industry Act (PIA), which seeks to overhaul the regulations and fiscal structures governing Nigeria’s oil and gas sector.   

In 2019, the President assented the Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Act, 2019, which requires an adjustment of the revenue due to the GON from PSCs whenever the price of crude oil exceeds $20 per barrel in real terms. The amended law further provided for the replacement of the existing production and price-based royalty regime and mandates the Minister of Petroleum Resources to cause the NNPC to call for a review of the PSCs every eight years. The new laws have reduced investment commitments in the Nigerian oil and gas sector from the major oil companies.

Over the next decade, Nigeria hopes to increase its reserves through field optimization, as well as encouraging investments in the development of marginal fields, deep water offshore, and exploitation of bitumen reserves. GON continues to prioritize investment in natural gas and gas-based industries, as outlined in the Gas Master Plan, a comprehensive gas infrastructure development program which targets new investments in gas processing and pipelines, gas-to-power projects, petrochemical facilities, and the NGFCP policy. GON’s ongoing power sector reform and privatization is also in need of required concurrent investments in new gas supply for independent power producers (IPPs) and refurbishment of former state-owned generation assets. Several gas commercialization projects include the existing Notore Chemical Industries fertilizer plant, Indorama Eleme’s petrochemicals plant, and the proposed Dangote $10 billion oil and petrochemical refinery now expected to come online by 2022. Dangote’s integrated project is expected to cost up to $15 billion in total, with $10 billion invested in the refinery, $2.5 billion in a fertilizer factory, and $2.5 billion in an underwater pipeline infrastructure to connect Nigeria’s Niger Delta to other West Africa markets.  The project will generate gas demands of over 2.5 billion standard cubic feet of gas per day. Investment opportunities range from financial services, gas transmission pipelines, pipe milling, fabrication yards, upstream gas development, LNG and liquefied petroleum gas (LPG) plants, gas processing facilities, and gas-based manufacturing industries. All these upcoming projects offer opportunities for foreign firms for sale of equipment and services. Many local companies are gradually getting involved in gas projects and look to the U.S. as a source for expertise, equipment, and services.

Nigeria’s oil and gas industry remains its most lucrative and viable investment opportunity, as observers believe that the oil and gas sector offers opportunities for marketing essential capital equipment and technology, for both extraction and production.  Despite a challenging environment, drilling equipment, gas technology and the supply and services sector continue to offer opportunities for U.S. exporters. GON has shown preference to foreign investors willing to invest in Nigeria’s oil and gas industry.  Although American companies continue to maintain some dominance of the high-end oilfield machinery market share, European and Asian suppliers are also increasing their market share mainly due to the financing model they offer. These companies continue to encroach in various areas of the upstream industry due to their business model (offering short-term capital equipment and project funds with favorable repayment terms) which is attractive to Nigerian stakeholders.

In terms of challenges, the Central Bank of Nigeria’s foreign exchange controls and Nigerian local content rules present significant barriers to foreign participation and imports in the oil and gas sector.  The Nigerian Content Act imposes limits on foreign management and the content of the petroleum sector, and stipulates specific indigenous participation in engineering, welding and fabrication projects, presents significant barriers to foreign participation and imports in the sector. While this does represent a significant barrier to entry, it is one that international companies can successfully manage with the right strategy.

In addition, foreign companies seeking to operate in Nigeria’s oil and gas industry are also expected to register with the Department of Petroleum Resources, the regulatory agency for all activities in the oil and gas industry.  GON is also taking steps to improving transparency in the procurement process through the Nigerian Petroleum Exchange (NipeX) portal.

Leading Sub-Sectors

Within the oil sector in Nigeria, the upstream and the downstream subsectors are the most lucrative with activities expected in the future when the private refineries and modular refineries being built come online.

The upstream segment currently accounts for the highest share of revenue, capital expenditure and investments. Given its capital-intensive nature, this subsector is dominated by large multinational companies and wealthy local investors and major companies in the country. The subsector provides more opportunities for equipment sales, service contracts, and procurement agreements. The downstream subsector is mostly controlled by local investors who setup logistics companies for the transportation of imported fuel, as well as service stations or filling stations where petrol, kerosene and diesel are sold to the final consumers.

Oil and gas machinery has potential as a source of investment opportunities for U.S. businesses in Nigeria.  Business observers believe that the oil and gas sector offer opportunities for marketing essential capital equipment and technology, for both extraction and production.  Training services is another area where U.S. service companies have comparative advantage, especially in exploration and production, engineering, and seismic techniques.


In the upstream subsector of the Nigerian oil and gas sector, several opportunities are available, including;

  • Provision of gas-to-liquid technology for approved bidders of the NGFCP
  • Technical service contracts with already existing gas producers
  • Opportunity to bid and own marginal oil fields which were recently auctioned by the DPR
  • Opportunities to access ancillary services accruing from the NLNG Train 7 project
  • Steel pipe supply for the on-going gas pipeline construction projects ongoing in the country.

Additional opportunities to offer services to the downstream sector exists from provision of insurance services for oil shipments, truck supply, service station equipment supply, storage equipment, consulting services, and legal services.

Within the upstream and downstream segments, opportunities abound in exploration and production, drilling and manufacturing equipment, support services, marketing, construction, engineering and consulting services, transportation and storage of crude oil, insurance, legal services, facilities maintenance, and environmental management.  NNPC’s commercialization activities offer opportunities for investment in pipelines and storage depots (tank farms) which are critical for the downstream sector.

Additional opportunities exist in the fabrication of pipes for the oil and gas industry and the water services sector. Nigeria’s estimated average demand for steel pipes range upwards of over 1 million to 1.2 million tons annually and offer opportunity for partnership for the pipe milling and fabrication services. GON’s prioritization of growing domestic gas sector to support power generation and gas-based industrialization presents a major opportunity for U.S. manufacturers and suppliers of modular gas stripping and treatment plant equipment, LNG, compressed natural gas (CNG), LPG, and methanol and fertilizer plant equipment.  American firms with advanced scalable technology and associated service experience in the oil and gas industry will be well-positioned to meet this requirement.

Opportunities in Mining

Nigeria offers other excellent investment opportunities for U.S. companies involved in the extractive industries including mining of solid minerals.  Opportunities especially exist in sales of mining equipment, machinery and associated technology and services. The solid minerals sector in Nigeria also provides an opportunity for U.S. companies to export to the Nigerian market. The Ministry of Solid Minerals Development (MMSD) is working actively to attract local and international investment into Nigeria’s mining sector. Currently, investments are being made in Gold, Baryte, Tin as well as Lead and Zinc mining and processing. Lithium deposits have also been found in the Northern part of the country and there are indications that this opportunity will be explored by local mining companies. The increased mining activities experienced by local and foreign investors provide U.S. firms with the opportunity for sale of mining equipment such as excavators, dredgers, drillers, and trucks to companies operating in the sector.

As part of its efforts to diversify revenue sources and exploit its non-oil sectors, GON has undertaken substantial institutional and legal reforms to address the underutilized potential of its solid mineral wealth and make the sector more attractive for investment. The Ministry of Mines and Steel Development secured a $150 million World Bank loan for enhancing mining projects and infrastructure development and has also drawn down funds from the GON’s 30 billion naira ($73 million) Natural Resource Intervention Fund which it plans to use to explore new minerals and enhance regulatory framework. The government also signed an MOU with the U.S. Geological Society to accurately map Nigeria’s estimated 34 potential minerals to open the country for investment. GON hopes to focus on eight sub-sectors: iron ore, gold, copper, coal, tar-sands/bitumen, barite, lead-zinc, and dimension stone. Nigeria has proven reserves of coal estimated at over two billion metric tons, and coal-fired electrical power is being explored by the GON as an additional source of power. The Nigerian Coal Corporation (NCC) indicate it has a mandate to identify U.S. technical partners for clean coal development and conversion, coal gasification, manufacture of coal briquettes, and coal to power generation to help meet GON’s proposed national power target of 14,000MW. HTG-Pacific Energy (a Chinese consortium) signed an MoU with GON for the exploration and mining of coal bricks. The MoU is expected to be followed by a power purchase agreement (PPA) which will boost investors’ confidence in the 1,000 MW, coal-fired plant project. Several states in Nigeria, especially Ondo State, which has the second largest deposits of bitumen in the nation, is keen to attract requisite foreign investors and technical partners for its exploitation and development. GON announced it will auction Bitumen blocks in the third quarter 2021 in the four rich states of Ondo, Ogun, Lagos, and Edo. 


Nigerian National Petroleum, Corporation (NNPC)  

Department of Petroleum Resources  (DPR)

Oil and Gas Blog:

Trade Events

  • (SAIPEC-
  • Nigeria Oil and Gas Conference & Exhibition (NOG), July 5-8, 2021 (20th Nigeria Oil and Gas Conference & Exhibition (
  • Nigerian International Petroleum Summit (NIPS), June 6-10, 2021 (
  • Offshore West Africa Exhibition & Conference (OWA), June 2022
  • OTL Africa Downstream Expo, October 25-28, 2021,
  • Oil & Gas Supply Value Chain Management Conference and Exhibition, July 28-30, 2021
  • Oil & Gas Upstream & Downstream Conference & Expo, July 28-30, 2021, (
  • Society of Petroleum Engineers SPE Nigeria International Conference & Exhibition, August 2-4, 2021
  • The Nigerian Association of Petroleum Explorationists (NAPE) international conference & exhibitions, November 14-18, 2021 -
  • USA FAIR 2022: ACCESS NIGERIA (April 28-30, 2022 - TBC), Eko Convention Center, Victoria Island, Lagos. Organized by the US Commercial Service exclusively for American exhibitors to meet thousands of prospective Nigerian businesses.

For more sector information, e-mail: Benedicta N. Nkwoh, U.S. Commercial Service, U.S. Consulate General, Lagos, Nigeria at