BMI's Executive Summary

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Industry Overview

Nigeria's huge natural gas reserves and the existing refineries support the Nigerian petrochemicals industry. Kaduna, Warri and Eleme are hubs for petrochemicals production in Nigeria. The state-owned Nigerian National Petroleum Corporation (NNPC) is the dominant player in the industry and has enjoyed a monopoly in chemicals and petrochemicals trade. The government is trying to restructure NNPC to separate the regulatory and commercial functions and make the organisation more efficient and productive. The sector has suffered considerably since 2006, due to rebel attacks affecting the country's four oil refineries. The two refineries at Kaduna and Warri, on which much of the petrochemicals production depends, have suspended operations since early 2006.

Industry Developments

The two refineries at Port Harcourt are only producing heavy fuel oil, and their crude oil throughput is less than 150,000 barrels per day (b/d), compared to a nominal capacity of 210,000b/d. In May 2007, these two refineries and the Kaduna oil refinery were privatised, when a 51% stake in them was sold to local company The Bluestar Oil Services Consortium, which paid US$561mn for a 51% stake in Port Harcourt refinery and US$160mn for a 51% stake in Kaduna refinery. However in July 2007, the investors withdrew from the process due to widespread opposition to the deal. The government is also planning a new set of regulations for the oil and gas sector. In September 2007, it was announced that the Kaduna and Warri refineries would reach 100% capacity utilisation from the current 60%. In October 2007, the government of the Niger state (in western Nigeria) and German company Shark-Petroleum and Investment signed an agreement for the construction of a US$1.8bn refinery in the state.

Key Challenges

Militancy and labour problems lead to frequent disruptions and erratic production in the Nigerian petrochemicals industry. Frequent breakdowns, a high level of downtime and erratic feedstock supplies continue to impede the development and growth of the industry. Inefficient management along with an ill-trained workforce and obsolete infrastructure contribute to the problems faced by the industry. Nigeria is radically restructuring NNPC and the energy sector under a new oil and gas policy, which is likely to be implemented in 2008. Major changes are scheduled in the Department for Petroleum Resources, the Ministry of Petroleum Resources and the Petroleum Products Price Agency, which regulates domestic pump prices.

Contents

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Chapter 1 - Executive Summary

Industry Overview

Industry Developments

Key Challenges

Industry Outlook

Nigeria Petrochemicals Industry SWOT

Chapter 2 - Market Overview

Market Structure

Table: Phased Implementation of Petrochemical Plants – Capacity in (‘000 tpa)

Table: Nigeria Petrochemical Sector – Cracker Capacity Data And Forecasts

Main Challenges

Chapter 3 - Industry Trends And Developments

Privatisation and FDI

Focus On The Chinese Market

Private Sector Participation Imperative For Sector Growth

NAFCON Bidding

Projects And Contracts

Proposed Projects

Chapter 4 - Industry Forecast Scenario

Table: Nigeria Petrochemicals Sector – Historical Data And Forecasts

Chapter 5 - Economic Outlook

Table: Nigeria – Macroeconomic Forecasts

Chapter 6 - Company Monitor

Nigerian National Petroleum Corporation (NNPC)

Viva Methanol/Axinova Polyolefins

Eleme Petrochemicals Company (EPCL)

Chapter 7 - BMI Forecast Modelling

How we generate our industry forecasts

Chemicals & Petrochemicals Industry

Cross checks

Competitive Landscape for Middle East & Africa Petrochemicals Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by US$ sales, % market share, employee size, registration date and ownership structure. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) on all leading international and national operators in each market, including competitive intelligence in the following: Overall geographic presence, competitive positioning against local companies; production capacity, sales and market share; joint ventures, foreign direct investment, projects and acquisitions strategy.