Nigeria’s petroleum industry is the largest in Africa, and it ranked thirteenth in the world as of December 31, 2014. However, the country’s industrial sectors are faced with the challenge posed by low oil prices, security concerns in the oil region and the perception of the difficulty of doing business in Nigeria, says global minerals consultancy Venmyn Deloitte manager Gbenga Ojo.
Venmyn Deloitte is intent on providing technical and economic guidance for oil and gas companies in Nigeria in terms of raising funds for operations, with the company also set to provide documentation to placate investors in terms of the economic potential of oil and gas deposits using the relevant petroleum resources and reserve reporting codes, he adds.
The mineral consultancy can also provide financial valuations of oil and gas projects and provide an independent technoeconomic assessment of these projects.
As of 2014, the upstream oil sector is the single most important sector in the Nigerian economy, accounting for over 90% of the country’s exports and about 80% of the federal government’s revenue.
Crude oil is currently produced from three different basins; the onshore Anambra, the offshore Benin/Dahomey (deep-water and ultradeep water) and the Niger Delta (shallow and deep offshore basins).
Nigerian Mining
Ojo also notes that the Nigerian mining sector has historically been neglected as most of the foreign direct investment into the country was targeted at the petroleum sector.
“This is particularly due to Nigeria being strongly associated with hydrocarbons rather than minerals,” he tells Mining Weekly.
However, Ojo says there is significant scope to leverage development of the country’s industrial sector on the mining and beneficiation of its mineral resources.
Despite the potential upside of mining in Nigeria, infrastructural challenges remain, with companies in Nigeria faced with inadequate road access and electricity required to effectively operate a mine. There is also a lack of technical skills, owing to the relative infant stage of mining in the sector, compared with the country’s more established oil sector.
The lack of these skills culminates in a proliferation of small-scale artisanal mining operations, where larger operations might be needed.
Venmyn Deloitte aims to provide independent advice on mineral, oil and gas assets where there is often an unrealistic expectation of the value of an exploration licence, comparised with the asset’s value using the international best practice valuation method, Ojo concludes.