Description

In the last decade or so, petroleum (oil) has claimed the top position in Nigeria’s export list, constituting a very fundamental change in the structure of the country’s international trade. Oil prospecting began in Nigeria as far back as 1908 but production and export started in 1958 in Shell’s field located at Oloibiri. Other companies joined soon after independence and the number of oil producing and exporting companies now stands at about 11.

The share of oil in total export value rose from less than 1 per cent in 1958 to a peak of 97 per cent in 1984 and has not been less than 90 per cent since then. In the first half of 1990, it accounted for over 95 per cent of total exports and its share of GDP has ranged between 25 and 30 per cent in recent years.

Nigeria produces about 2,000,000 million barrels per day and is the sixth largest oil producing country in the world.

The petroleum industry is usually divided into three {3} major components, upstream, midstream and downstream. Midstream operations are usually included in the downstream category.
The downstream oil sector is a term commonly used to refer to the refining of crude oil and the selling and distribution of natural gas and products derived from crude oil. It cuts across manufacturing, marketing, sales, distribution, transportation and haulage.

There are significant investment opportunities in the downstream sector of the oil and gas industry in Nigeria. Statistics have it that there are over six thousand {6,000} independent petroleum products marketers and six {6} major marketers of distributing and marketing petroleum products across the country.

Nigeria currently consumes an estimated sixty million {60,000,000} liters of refined petroleum products {PMS, DPK and AGO} per day and with population of over one hundred and sixty five million {165,000,000} people, growing at the rate of about 2.7% per annum with an estimated economic growth rate of 5.7% in the past five {5} years, the market for refined petroleum products in Nigeria, is established, growing and sustainable.