PETAN Projects $7bn Equipment Spending to Lift Nigeria’s Oil Output to 3m bpd by 2030

• Says indigenous firms now generate $6 billion annual revenue in services

•Local content push aims to match global service standards with OEM technology partnerships

Peter Uzoho in Houston, Texas

Nigeria’s indigenous oil and gas service companies, under the aegis of Petroleum Technology Association of Nigeria (PETAN), said the sector will need about $7 billion in capital expenditure on equipment over the next four years to help raise the country’s crude oil production from 1.5 million barrels per day (bpd) to three million bpd by 2030. 

Chairman of PETAN and Chief Executive Officer of Geoplex, Wole Ogunsanya, made the projection yesterday during the PETAN Original Equipment Manufacturers (OEMs) Investment Forum at the ongoing Offshore Technology Conference (OTC) in Houston, Texas, United States.

The session, themed, “Strengthening OEM Partnerships for Local Content Growth,” brought together Nigerian service providers and global equipment manufacturers to explore technology transfer and collaboration opportunities. 

Ogunsanya said, “If you do the maths, that’s a 50 per cent gap from where we need to be. We need to spend $1.8 billion every year on equipment to catch up between now and the 2030 target, to increase production to three million barrels.

“Even if I discount that, we’re looking at about $7 billion spent in the next four years just on equipment.”

He said the push was driven by Nigeria’s refining ambitions and the need to produce competitively.

Ogunsanya stated, “We’re always looking for technology. If you have the best technology in the world, we have the funding to do it, we have the human capital to deploy them.

“We’re trying to raise oil and gas production in Nigeria from where it is — 1.5 million barrels per day, to 3 million barrels because we have the refineries to process them.”

Formed in collaboration with Nigerian Content Development and Monitoring Board (NCDMB), PETAN now comprises 121 companies delivering services across the upstream, midstream, and downstream sectors.

Ogunsanya revealed that the association currently generated between $5 billion and $6 billion in annual revenue within Nigeria’s petroleum industry. 

He emphasized that local content did not mean lower standards, explaining that PETAN companies are delivering services at the same quality level as international contractors, such as Schlumberger, Baker Hughes, and Halliburton.

He added that members were already active beyond Nigeria’s borders, providing well services and operating land and swamp rigs.

Ogunsanya said, “With the right technology, Nigerian service firms would still produce oil and gas at the same service quality as anywhere in the world, such as in Aberdeen, Middle East, and in the United States.”

The PETAN chairman stressed that indigenous firms must stay current with global technology to remain competitive as they took over assets divested by international oil companies.

He said, “Just because we’re indigenous companies, we’re buying assets, we’re creating the capacity to deliver services. We need to keep abreast of the technology that we need to ensure we produce these oil and gas at a reasonable price for the country.”

He urged OEMs to view Nigerian firms as strategic partners rather than competitors, saying, “We’ll have a forum with you guys, the OEMs, to assure you that with the capacity in Nigeria, you have an advantage with Nigerian companies. So, I’m inviting you to network with our members. We assure you that your technology will be deployed.” 

Ogunsanya also highlighted the capacity gap created by IOC divestments.

According to him, when ExxonMobil or Shell sell onshore assets, the training programmes they run for Nigerian engineers often shrink or stop entirely.

 “When Seplat buys ExxonMobil asset, if ExxonMobil is training 50 Nigerians every year, they will not train 50 anymore… So Seplat also now has to step up,” he said. 

He said the same applied to Renaissance, which acquired Shell’s onshore assets.

“Renaissance now needs to step up, know what capacity is out there, what training is out there, what technology is available to ensure that we’re able to bring it to Nigeria and produce this oil efficiently for the country,” he stressed.

Ogunsanya reaffirmed PETAN’s commitment to supporting Nigeria’s production targets over the next decade.

He stated, “Nigeria is ready. Our projection in PETAN is $7 billion spend. And we’re going to be growing oil and gas production in Nigeria for the next five to ten years.”

He called on OEMs to leverage the capacity already built within PETAN, adding, “Local content does not mean that we’re not going to upgrade our technology, we’re not going to catch up with the world on where we need to be in terms of know-how. And we’re doing that right with many of you in Nigeria.

“We’re welcoming many of you to join us in that stride.”