The Society of Energy Editors (SEE) will be holding second edition of Outlook 2024 following the second quarter edition released earlier in the year.
The outlook is produced quarterly by Fellows and Associates of SEE to provide advisory and guidance for industry.
These are the quarterly Outlook programs:
Oil Exploration and Production
– Expect increased oil production as new fields come online
– Ongoing efforts to revamp existing fields to boost output
– Management of the 2024 marginal fields bid round by the Nigeria Upstream Petroleum Regulatory Commission, NUPRC, to impact investor confidence.
– Challenges: Security issues in the Niger Delta, ongoing divestments by oil majors, lack of investments, decaying infrastructure, poor governance structure, and poor implementation of the Petroleum Industry Act, PIA.
Domestic Refining, Fuel Imports, and Petroleum Subsidy
– Refineries to operate at limited capacity due to unending maintenance and upgrades.
– Fuel imports to remain high, putting pressure on foreign exchange reserves.
– Petroleum subsidy to remain a significant burden on government finances.
– With fuel sold at different prices across the country in line with subsidy removal, price hike could hit 300 percent in some states compared to the same time in 2023.
Gas Production and LNG Exports
– Gas production to increase as new projects come online.
– LNG exports to remain strong, with Nigeria maintaining its position as a key global supplier.
– Challenges: Gas infrastructure constraints, lack of investments and domestic supply shortfalls to persist.
Power Generation, Transmission, and Distribution
– Power generation to increase as new plants come online
– Transmission and distribution infrastructure upgrades to continue
– Challenges: Funding shortfalls due to lack of investment coupled with grid stability issues.
Labour Relations
– Potential labour unrest in the downstream and upstream petroleum sectors in solidarity with organized labour regarding cost-of-living crises.
– Electricity sector workers may protest over unpaid wages and benefits. Workers are also poised to show solidarity with organized labour over cost-of-living crises.
Solid Minerals Development
– Efforts to grow revenue generation from solid minerals to continue.
– Newly launched mining marshals to curb the impact of artisanal mining.
– Lack of clarity on government’s engagement strategy with potential investors will continue to impact investors’ appetite for mining portfolios.
– Challenges: Insecurity, Artisanal mining, regulatory framework gaps, poor state of road and rail network for evacuation of mined minerals.
Community Development
– Efforts to institutionalize the Host Community Development Fund for oil and gas producing communities to continue in line with implementation of the PIA.
– Expect increased community engagement and development projects.
– Challenges: Insecurity, crude oil theft, artisanal refining, oil spill incidents to persist.
Nigerian Content Development
– Nigerian Content Development Monitoring Board to continue domiciliation efforts.
– Expect increased local participation in the oil and gas industry.
– The management of the Nigerian Content Intervention Fund by the Bank of Industry could suffer constraints owing to political interference
– Challenges: Political interference to hobble the gains attained.
Niger Delta Development Commission
– Niger Delta Development Commission to continue development projects in the region.
– Expect increased focus on infrastructure development and job creation.
– Challenges: Political interference, abandonment of projects, non-payment for completed projects
Hydrocarbon Pollution Remediation Project
– Efforts to restore oil spill impacted communities in Ogoniland to continue
– Expect progress in cleanup and remediation activities
– Challenges: Political interference
This outlook highlights the key trends and challenges expected in Nigeria’s energy sector during the third quarter of 2024. The sector is expected to experience growth and development, but also faces significant challenges that need to be addressed to ensure sustainable progress.
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