The Nigeria oilfield equipment rental services market is expected to grow at a CAGR of over 2% during the forecast period. Factors such as increasing demand for advanced technology, tools, and equipment to increase the efficiency of exploration and production activities in onshore and offshore areas is expected to drive the market for oilfield equipment services in Nigeria. Moreover, increasing investments in the upstream sector is further expected to promulgate the market during the forecast period. However, the frequent attacks on oil and gas infrastructure by militants and volatile crude oil prices are expected to restrain the growth of the market being studied.

  • Nigeria’s offshore oil and gas industry continues to expand, albeit not very fast, opening more market opportunities. The growth of Nigeria’s offshore exploration and production activities has been mainly driven by the efforts of governments in their region, in turn driving the oilfield equipment services market.
  • The development of deepwater and ultra-deepwater reserves is expected to create opportunities for the market player. For example, development of ultra-deepwater Egina oilfield by Total is one of the key projects, which started production in the first week of 2019.
  • The country has been focusing on increasing the investments in upstream sector to maintain the country’s crude oil and natural gas production, which in turn is expected to drive the oilfield equipment rental services market during the forecast period.



Key Market Trends

Offshore Segment to Dominate the Market

  • Nigeria’s offshore oil and gas industry continues to expand, albeit not very fast, opening up more market opportunities. The growth of Nigeria’s offshore exploration and production activities has been mainly driven by the efforts of governments in their region, such as providing key incentives and supporting policies to unlock the investment opportunity, as well as a growing list of international oil and gas companies interested in exploring alternative fields to replace the maturing offshore producing sites.
  • The China National Offshore Oil Corporation has mobilized a USD 3 billion investment, in addition to the USD 14 billion already spent on its existing oil and gas operations in the West African country. A large share of this investment goes into the operations in Nigeria. One of the most ambitious ultra-deep offshore projects is the Egina oil field in water depths of between 1,400 and 1,700 meters. Total projected that the oil field is expected to peak at 200,000 barrels/day.
  • Further, since 2008, the Nigerian government has been trying to pass the Petroleum Industry Bill (PIB). The country lost billion dollars of investments due to the failure to pass the bill. One section of the bill was finally passed in 2018, as the Petroleum Industry Governance Bill (PIGB). Under this, the oil sector will be restructured, including the national oil company, the oil and gas regulator, the Department of Petroleum Resources (DPR), and the Nigerian National Petroleum Corporation (NNPC), which will become the National Petroleum Company (NPC), a fully commercial integrated entity. This reform is expected to drive the Nigerian offshore oil and gas upstream market, in turn driving the oilfield equipment rental services market.
  • Therefore, due to above mentioned factors the offshore segment is expected to be the largest segment during the forecast period.



Increasing Investments to Maintain the Country’s Production is Expected to Drive the Market

  • Nigeria is one of the largest and oldest oil producers in Africa. The oil and gas sector is one of the most important sectors in the country’s economy, accounting for more than 90% of the country’s exports and 80% of the Federal Government’s revenue.
  • As of 2018, Nigeria has the largest oil and gas reserves in the African region, with around 37 billion barrels of oil and 47.2 billion cubic meter (bcm) of gas. With a production of 2.05 million barrels per day in 2018, which is approximately more than 20% of the total production in Africa, Nigeria continues to dominate African oil production.
  • The country’s economy was hit hard by the global commodity price downswing in 2014. Investment in the Nigerian upstream oil and gas sector declined by 13% annually, during 2015-2017, due to the downturn in the crude oil price. The decline in spending was largest in 2016, driven by severe disruptions on major oilfields. Oil and condensate production recovered in 2017 and was returned to remain at the level of more than 2 million bbl/d in 2018. Hence, the drilling activity in the country is ramping up and is expected to continue on account of current and upcoming projects, which is expected to drive the oilfield rental services market during the forecast period.
  • Moreover, development of ultra-deepwater Egina oilfield by Total is one of the key projects, which started production in the first week of 2019. The Egina field may significantly boost the production and cash flow, in 2019, and continue onward. Further, NNPC (Nigeria National Petroleum Corporation) has signed an agreement for seven Critical Gas Development Projects, to deliver around 3.4 bcf of gas per day, in order to bridge the medium-term supply gap, by 2020, on an accelerated basis.



Competitive Landscape

The Nigeria oilfield equipment rental services market is moderately fragmented. Some of the key players are Schlumberger Limited, Baker Hughes Company, Halliburton Company, Weatherford International Plc, and TechnipFMC Plc.

Reasons to Purchase this report:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support