BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Nigeria

The latest Nigeria Oil & Gas Report from BMI forecasts that the country will account for 3.33% of MEA regional oil demand by 2010, while providing 7.47% of supply. MEA regional oil demand rose to 10.7mn b/d last year and should average 10.9mn b/d in 2006, before reaching 12.2mn b/d by 2010. MEA gas consumption in 2005 was 343bcm, with demand of 533bcm targeted for 2010. Production last year of 448bcm should reach 774bcm by the end of the decade. Nigeria’s share of consumption in 2005 was 2.62%, while its contribution to production was 4.91%. By 2010, its share of demand is forecast to be 2.44%, with the country accounting for 5.81% of supply.

Assuming an uneventful Q4, we are now predicting an OPEC basket price for 2006 averaging US$61.10/bbl – an increase of US$1.10 from our June forecast. This also represents a 19% rise from the FY05 average. Our forecasts for the US, Brent and Urals are US$66.40, US$65.40 and US$61.60/bbl respectively. For 2007, we continue to assume an OPEC basket price of US$50/bbl, which implies US$55.40 for the US, US$53.40 for Brent and US$49.50 for Urals. Prices are then forecast to fall by around US$5/bbl in 2008-2010, with the OPEC price averaging US$45/bbl over the period.

Nigerian real GDP growth is now forecast by BMI at 4.2% for 2006, following 7.0% in 2005. We are assuming 7.5% growth in 2007 and 4.2% in 2008, followed by 4.1% in 2009 and 2010. We expect oil demand to rise from 337,000b/d last year to 406,000b/d in 2010, representing 3-4% annual growth that broadly matches our underlying economic assumptions. State-owned NNPC accounts for more than 50% of oil production and over 40% of gas supply, but has a large number of IOC partners contributing to a forecast rise in oil production from 2.58mn b/d last year to 2.90mn b/d by 2010 – subject to rebel attacks on infrastructure and OPEC quota policy. Gas production should reach 45bcm by 2010, up from 21.8bcm last year. Consumption is expected to rise from 9bcm to 13bcm by the end of the forecast period, allowing exports of 32bcm.

In the BMI Business Environment Ranking matrix, Nigeria this quarter receives a slightly higher composite score of 24, which now ranks the country outright 15th out of 16 states included in the MEA region, ahead of Saudi Arabia. The overall business environment can be considered highly unattractive in a regional context, thanks largely to a very high level of perceived economic and political risk. These factors undermine substantial resources and significant oil/gas growth potential, plus a moderate production sharing/licensing regime and competitive framework.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Regional Market Overview

Middle East/Africa Region

Table: MEA Oil Consumption (000b/d)

Table: Middle East/Africa Oil Production (000b/d)

Table: Middle East/Africa Oil Refining Capacity (000b/d)

Table: Middle East/Africa Gas Consumption (bcm)

Table: Middle East/Africa Gas Production (bcm)

Table: Middle East/Africa LNG Exports/(Imports) (bcm)

Nigeria

Chapter 3 - Business Environment Rankings

Nigeria

Middle East/Africa Region

Chapter 4 - Nigeria Business Environment Ranking

Economics – long-term risk

Politics – long-term risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 5 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Chapter 6 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 7 - Regional Supply and Demand

Middle East/Africa

Table: Middle East/Africa Oil Production (000b/d)

Table: Oil Consumption (000b/d) – Middle East/Africa

Chapter 8 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 9 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: Nigeria Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Nigeria Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 10 - Economic Outlook

Table: Nigeria – Macroeconomic Forecasts

Chapter 11 - Country Snapshot: Nigeria Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Consumption and Stratification

Chapter 12 - Regional Case Study

Global Player With Conflicting Domestic Needs

Chapter 13 - Competitive Landscape

Executive Summary

Table: Key Players – Nigerian Oil & Gas Sector

Overview/State Role

ExxonMobil – Summary

Table: Key Nigerian Upstream Players

Chevron - Summary

Table: Key Nigerian Downstream Players

Shell - Summary

Eni – Summary

Total – Summary

CNOOC – Summary

Petrobras – Summary

BG – Summary

Chapter 14 - Company Monitor

Nigerian National Petroleum Corporation (NNPC)

Royal Dutch Shell

Company Analysis

SWOT Analysis

ExxonMobil

Company Analysis

SWOT Analysis

Chevron

Company Analysis

SWOT Analysis

Eni

Company Analysis

SWOT Analysis

Total

Company Analysis

SWOT Analysis

Chapter 15 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 16 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Middle Eastern and African Oil and Gas Sources

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BMI's Middle Eastern and African Oil and Gas Reports are based on an extensive network of multilateral organisations, government departments, oil and gas industry associations, chambers of commerce and company reports. Information sources include: