Oil and Gas Industry Expected to Help Nigeria’s 2017 Economic Growth

Akanimo Udofia pic
Akanimo Udofia
Image: desicongroup.com

With over 25 years in Nigeria’s oil and gas industry, seasoned executive Akanimo Udofia works as the managing director and CEO of Desicon Engineering Ltd. in Lagos. In this capacity, Akanimo Udofia has helped grow the company from 100 employees to over 4,000, serving as a driving factor in the company’s successful operational performance.

In July 2016, Nigeria’s minister of finance announced that the country was in a recession. According to the leading credit rating agency Moody’s, the oil and gas industry will greatly help resolve the country’s financial worries in 2017.

Moody’s said Nigeria’s oil and gas industry will help the country’s economy bounce back from last year’s 1.5 percent contraction in the country’s economy. The firm predicts the country’s economy will bounce back, reaching 2.5 percent growth in 2017.

The financial firm predicts that two-thirds of the country’s real growth in 2017 will come from the oil sector, with the country’s abundant hydrocarbon reserves providing key credit support. Nigeria sits atop roughly 37 billion barrels of oil, more than a quarter of Africa’s reserves. Ninety percent of Nigeria’s goods exports come from oil and gas.


OPEC Agreement to Cut Oil Production

OPEC pic
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With 25 years of experience in the oil and gas industry, Akanimo Udofia serves as the managing director of Nigeria-based Desicon Engineering Ltd. In this capacity, Akanimo Udofia has coordinated efforts related to the completion of projects totaling over $10 billion. The recent agreement to cut oil production by several of the countries belonging to the Organization of the Petroleum Exporting Countries (OPEC) has had a major impact on the petroleum industry.

On November 30, OPEC reached an agreement to reduce oil production. According to the agreement, members of OPEC will cut production by 1.2 million barrels per day. A deal of this kind has not been reached for over eight years.

In recent years, the oil market has been oversupplied, negatively affecting the global supply balance and keeping oil prices very low. This has had an adverse effect on the industry as a whole, but especially on countries like Nigeria and Venezuela. The goal of the OPEC agreement, signed in Vienna, is to benefit the global economy by stabilizing supply levels. The highest-producing nation in OPEC, Saudi Arabia agreed to the greatest level of production cuts.

The impact of the deal was immediate, as prices rose to above $55 per barrel in less than a week, marking a 16-month high. It is unclear whether non-members of OPEC will join in the agreement to curb production in coming months.

Violence Plagues Oil Production in Nigeria

Akanimo Udofia pic
Akanimo Udofia
Image: desicongroup.com

As the managing director of Nigeria-based Desicon Engineering Ltd., Akanimo Udofia works extensively with several international oil companies. At Desicon Engineering, Akanimo Udofia is responsible for developing and implementing strategies to promote the organization’s growth. Due to numerous incidents of sabotage and violence, the oil and gas industry in Nigeria has suffered serious production and distribution setbacks.

Authorities have reported 58 incidents of sabotage along pipelines in Nigeria in the first 11 months of 2016. The attacks have been orchestrated by a number of militant groups who claim to be seeking their share of profits from the oil industry. In addition to these incidents, other acts of violence, including kidnappings, have occurred.

Already reeling from low global oil prices, the attacks have caused further problems for the Nigerian oil industry. First, overall production has decreased. Throughout 2016, it is estimated that over 130 million barrels have been lost. Additionally, the spillage and leaks that result from the attacks have put the fragile Niger Delta ecosystem at risk.

Nigeria’s Sweet Crude Oil

Desicon Engineering pic
Desicon Engineering
Image: desicongroup.com

The managing director of Desicon Engineering Ltd., Akanimo Udofia has over 25 years of experience in the oil and gas industry. Under Akanimo Udofia’s leadership, Nigeria-based Desicon Engineering has grown from a company of approximately 100 employees to one of over 4,000. As a country, Nigeria yields a high level of sweet crude oil.

Oil was first discovered in Nigeria in 1956 by Shell-BP at Oloibiri in the Niger Delta. Since then, petroleum export and production has become a major industry in Nigeria, accounting for over 90 percent of the country’s gross earnings.

The crude oil produced in Nigeria is described as “light” and “sweet.” These words refer to a highly desirable type of crude oil that is characterized by a sulfur content of less than 5 percent. The low sulfur content allows Nigerian crude oil to yield a large amount of high value products such as diesel, gasoline, and jet fuel.

Nigeria’s sweet crude oil is also desirable because it is safer to extract and transport. In addition, it is easier to refine, causing less damage and subsequent long-term maintenance at refineries.

Offshore Oil Production Rising Globally

Akanimo Udofia pic
Akanimo Udofia
Image: desicongroup.com

Akanimo Udofia maintains responsibilities as CEO and managing director of Desicon Engineering, a leader in Nigeria’s oil and gas industry. In his senior roles, Akanimo Udofia is responsible for business strategy, growth, and sustainability.

One of the ways oil companies acquire oil is through offshore drilling, which accounted for 29 percent of the industry’s crude oil in 2015.

In that year, offshore oil production also rose, reaching the highest level in five years. Though the industry saw an annual decline from 2010 to 2013, production increased in 2014 and went even higher in 2015, the most current year with available data.

According to the US Energy Information Administration, 2015 saw over 50 countries produce over 27 million barrels. Brazil, Mexico, the United States, Norway, and Saudi Arabia produced the most globally, accounting for 43 percent of the yearly total.

Analysts expect figures to rise even higher for 2016, with many oil-producing countries continuing to increase their offshore production.