Business

How to Start an Oil and Gas Business in Nigeria

How to Start an Oil and Gas Business in Nigeria: You are undoubtedly well informed on the legitimacy of Nigeria’s oil and gas business. This is not news to you. Because of its propensity for generating quick billionaires, this is the kind of industry that almost absolutely everyone dreams of being a part of.

There are a number of Nigerians who have become billionaires overnight thanks to the oil and gas sector, but I’m not going to reveal names here.

The income of the richest woman in Nigeria, who is also the wealthiest woman in Africa and the wealthiest black woman in the world, came solely from the oil and gas industry. This makes her the wealthiest woman in the world who is also black. As a consequence of this, it should not come as a shock that the oil and gas industry is quite appealing.

However, many people are deterred from pursuing employment in the oil and gas industry due to the general assumption that the industry has a poor impression. It is a common misconception that in order to succeed in the oil and gas industry, one must have access to a significant amount of financial resources, specifically millions of naira. This could not be further from the truth. Because the oil and gas industry is so vast and adaptable, those who are familiar with it stand a good chance of turning a tidy profit on relatively modest investments. There is no jest involved when I say that I know a fuel tanker driver who makes millions of dollars and owns a car worth 25 million naira.

How to Start an Oil and Gas Business in Nigeria

There are numerous investment options available in the oil and gas business, including the following:

1. PRIVATE REFINERY

You’ve probably heard that one of the reasons we as Nigerians are unable to benefit from our massive oil reserves is because our refineries are in poor condition. When crude oil is mined, it must be transported overseas for refining and then returned for sale. This would have already resulted in a doubling of the price of gasoline.

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Therefore, consider a situation in which you have a refinery to which individuals can send crude oil to be refined rather than the traditional export-import model; this would earn you more money than you could spend in a lifetime.

However, this is not a business that can be started on a shoestring budget. You’re going to require a lot of money. However, I believe that through crowdsourcing, you can enlist others in pooling resources to establish a mini-refinery or perhaps a regular one.

2. OIL MINING

There are many ways to get usable petroleum out of the ground in a certain area, and the quality and amount of resources that can be gotten from the extraction vary. This is another opportunity for Nigerians with huge pockets and contacts. Few people are eligible for this type of business opportunity because it requires having ‘long legs.’ To begin this business, you first obtain an oil block or rent one from someone who already has one, and then mine crude oil that will eventually be processed.

3. OIL SERVICING

Another potential investment in the oil and gas industry is the establishment of an oil servicing firm. Oil servicing companies serve oil and gas companies with management, maintenance, and consulting services.

Construction, transportation, cleaning, recruitment, welding, catering, event planning and management, electrical engineering, and product supply are just a few of the services provided by oil and gas servicing organizations. Therefore, if you are capable of providing any of the services described above, try submitting proposals and soliciting patronage from oil and gas firms.

4. OIL IMPORTATION

Another business possibility in the oil and gas industry is gasoline importation. Nigeria’s main imports are oil, fuel, and products made from distillation. Between January and March of 2021, Nigeria spent 688 trillion Naira to bring gasoline into the country. The value of oil imports has gone up slightly over the last three quarters, according to the most recent data. But in the third quarter of 2018, about 855 billion Naira worth of gasoline was sent to Nigeria, which was the highest amount. It’s remarkable but true that despite its massive oil reserves, Nigeria continues to buy petroleum from other countries.

Read also: Top 10 Best Generator Brands In Nigeria (2022)

5. PETROLEUM BY-PRODUCTS

Materials known as petroleum products are those that are created from crude oil (also known as petroleum) during the refining process at oil refineries. Petroleum products, on the other hand, are complicated mixes, in contrast to petrochemicals, which are a collection of well defined and typically pure organic components. The vast bulk of crude oil is refined into various types of fuels, which all fall under the category of “petroleum products.”

Refineries are able to create various proportions of petroleum products since these proportions are contingent not only on the chemical make-up of the crude oil but also on the requirements of the market. The majority of oil products are put to use as “energy carriers,” which includes a wide variety of grades of fuel oil as well as gasoline. These fuels include gasoline, jet fuel, diesel fuel, heating oil, and heavier fuel oils, or they can be combined together to produce those fuels.

The production of asphalt, tar, paraffin wax, lubricating oil, and other types of heavy oils can also be accomplished with heavier fractions, which have a lower volatility. Other chemicals, some of which are employed in the chemical processes that generate plastics and other valuable materials, are among the products that are produced by refineries. Since petroleum often contains a few percent of molecules that contain sulfur, elemental sulfur is frequently created as a byproduct of the refining process for petroleum. Carbon, in the form of petroleum coke, and hydrogen are two more elements that can be created as byproducts of the petroleum industry. The created hydrogen is frequently utilized as an intermediate product in subsequent operations within the oil refining industry, including hydrocracking and hydrodesulfurization, amongst others.

Individuals get passive income by selling by-products of crude oil refining. These products are used to make a variety of other important goods, including wax, paraffin, tar, and asphalt.

6. OIL AND GAS RETAIL AND SUPPLY

This is the day-to-day business of nearly everyone in the oil and gas industry. It is concerned with the sale and distribution of petroleum products such as diesel, kerosene, and gasoline. The primary focus of retail marketing is on the distribution of products such as gasoline and diesel fuel through a chain of gas stations, both branded and unbranded. About 9% of Nigeria’s GDP comes from the oil industry, which is also the country’s main source of export value. Nigeria is the first oil producer in all of Africa and the eleventh largest oil producer in the world. Managing a retail network involves:

Managing a retail network involves:

  • Creating and maintaining a space that both draws in and retains consumers is a priority.
  • Providing outstanding service to customers across the board, regardless of the product or service being sold.
  • Maintaining an effective inventory control system for both fuel and goods.

7. HAULAGE

The business practice of delivering goods by means of a highway or railway is known as haulage. In its most basic form, it refers to the transportation of a container from one location to another. There are primarily two types of haulage, which are known as carrier haulage and merchant haulage.

The term “carrier haulage” refers to the process in which a shipping company is responsible for moving the container, whereas the term “merchant haulage” describes the process in which the container is moved by the consignee with the assistance of a designated haulage contractor.

As I indicated previously, I know a fuel tanker driver who drives a million-dollar automobile; this is what he does. He owns fleets of takers that he employs to transport petroleum supplies for a variety of oil corporations, including Total, Oando, and others.

8. OPTIONS

You’ve certainly heard of fuel alternatives such as bio-fuel and fuel savers; these are popular in Nigeria and you may profit from them as well. Biofuel is any type of fuel that comes from plant or algae material or animal waste. Biofuel is a source of renewable energy, unlike fossil fuels like oil, coal, and natural gas, because the materials used to make it are easy to get more of. Biofuel is often seen as a cheaper and less harmful alternative to petroleum and other fossil fuels, especially since the price of petroleum is going up and more people are worried about how fossil fuels contribute to global warming.

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