The federal and State  election in Nigeria added large layers of risk and uncertainty in the Nigeria oil and gas industry, this a report from IHC inc. (NYSE IHS) a global source of critical information and insights.

industrialThe pre-election evaluation shows a contest between Nigeria’s incumbent president and main opposition challenger Muhammadu Buhari and it is split along ethnic and religious lines. if any issues arise from this election chances of a long dispute will further the delay of the petroleum industry bill which is hoped to cause a badly needed petroleum industry reforms first proposed in 2008,

“Elections will be yet another disruptive force for Nigeria, regardless of the elections outcome, energy investors will continue to face fiscal and regulatory uncertainty as a result of the ongoing challenges to the passage of the PIB bill, that uncertainty has already constrained deepwater exploration and development ” said Roderick bruce, IHS’s principal analyst.

Some of the highlights contained in the report titled: Nigeria Oil and Gas sectors implication of 2015 elections below:

  • Election likely to destabilise Nigeria’s federal structure, and may trigger further economic headwinds, disorder and violence, the future will determine the future of oil and gas investment in Nigeria.
  • The winner of the election will face a lot of fiscal challenges, lower crude oil prices and falling production will reduce overall revenue, which have traditionally fed the country’s patronage system.
  • A  Jonathan win will likely not bring any immediate oil sector reform, the current oil sector policy inertia will continue, a Buhari win may bring more reform impetus, Jonathan would face significant challenges in implementing change.
  • A buhari will could unlatch significant unrest in the oil-producing Niger Delta which is Jonathan’s home region, this unrest could disrupt oil and gas production and exports.
  • competition for political control could obstruct passage of the PIB which will further delay deep water expiration and production.
  • Local content will continue as government policy direction and priority , offering partnership opportunities for foreign investors but pressurising the economics of the upstream operations.

The report indicated that whoever wins the election, the closely run and highly contentious nature of the elections increases the risk that the polls will come with violence and disorder, and the high probability of disputed results will limit the states ability to implement energy policies effectively.

Many Foreign bodies are already predicting win for Buhari though, the Eurasia group predicted this also in this article featured in allafrica.com.

The Future of the Oil and gas is purely predicated by outcome of the election and the status of what the legislation does with the waiting petroleum industry bill (PIB) which  should funnel investment into the Nigeria oil and gas,  the Guardian online predicted that there are indications that the nation’s oil and gas market would bounce back in the next four years.

Recent report by an international agency predicts a significant growth in the market value to about $7.5 billion by 2019, this is an awesome news and with recent predictions from the CEO of Shell Ben Van Beurden who sees Oil price increased to $90 in the long term, he said it was impossible to predict when prices would return to those levels and said oil prices were poised to remain volatile in the mid-term.

Roselyn Nwachukwu

Business Development Executive

Epoxy Oilserv Nigeria Limited

For Inquiries or Request for Quote, Shell Lubricants, Oil and Gas Chemicals, Welding consumables, fabrication Services

email: Roselyn.nnwachukwu@epoxyoil.com

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