Coatings World - November 2015

by Shem Oirere Africa Correspondent

Two of Africa’s hydrocarbon indus- try giants, Nigeria and Angola, are poised to dominate the continent’s offshore oil and gas paints and coatings market in the short- and medium-term on the back of ambitious projects already underway or in the pipeline.

Market analysts Frost & Sullivan predicts
in a new report the two countries, which
have a combined 46 billion barrels of proved
crude oil reserves, “present attractive growth
and operational expansion opportunities for
manufacturers in the offshore oil and gas
(O&G) paints and coatings market.”
“With raw material availability and local
manufacturing capabilities catalyzing pro-
duction and supply lines, the two countries
are rapidly emerging as the African hub for
the offshore oil and gas paints and coatings
market,” the report said.

Currently, Nigeria and Angola have lined up a total of 19 offshore oil and gas projects over the next five years and these are expected to substantially grow the two countries’ offshore oil and gas paints and coatings market.

Angola, which holds 9 billion barrels of proved crude oil reserves, most of it located in offshore areas of Lower Congo and Kwanza basin, has up to 10 major offshore projects set for implementation in a bid to increase its crude production capacity. The projects include Mafumeira Sul, Luanzi field, Kizomba Satellites Phase 2, East Hub Project (Cabaca Norte, South-East), Greater Plutonio Phase 3, Kaombo Project, Negage, Lucapa, Chissonga, Malange and Cameia.

The projects are being developed by major international oil companies (IOCs) of Chevron, ExxonMobil, Total, BP, Maersk Oil, Eni SpA and Cobalt either separately or jointly.

Earlier, US Energy Information
Administration (EIA) said: “Because several
of Angola’s older deepwater fields are past
their peak production, the new capacity ad-
ditions from upcoming projects are more
likely to sustain Angola’s crude oil produc-
tion around or slightly above current levels
over the medium term rather than provide a
substantial boost.”
Six of the Angolan projects have reached
final investment decision (FID) phase with
EIA saying: “Despite the recent drop in global
oil prices, projects that are past FID stage will
most likely not be cancelled because the pro-
curement phase has already started.”
In Nigeria, a country with 37 billion bar-
rels of proved crude oil reserves, second only
to Libya, IOCs have unveiled nine offshore
oil and gas projects to be implemented over
the next five years and which are likely to
boost growth of the West African country’s
offshore oil and gas market.

Although the country’s controversial Petroleum Industry Bill has held back several of the planned projects, with only two having been sanctioned by IOCs, the West African economy presents one of the largest growth opportunities for the offshore oil and gas paints and coatings market.

The projects have a combined capacity of 1.1 million new productions in five years according to EIA.

In the new Frost & Sullivan report both
countries generated revenues of $675.1 mil-
lion in 2014 earnings set to rise to $1,131.4
million in 2019 based on the study of “the
offshore oil and gas facilities, dry docks and
fabrication yards.”
“The subsidization of manufacturing
makes Nigeria and Angola vital to the produc-
tion of offshore oil and gas paints and coat-
ings in Africa, with the goal of African needs
being fulfilled by African countries,” said
Frost & Sullivan Chemicals and Materials re-
search analyst Abdul-Baasit Abdullah.

“The drop in crude oil prices has reduced
the base costs of paint through a reduction
in raw material cost of 8. 3 percent, driving
competitive pricing and consumption.”
Construction of local production facili-
ties will be vital in order to ensure cost-com-
petitiveness, as transportation costs of raw

Nigeria and Angola are poised to dominate Africa’s offshore oil and gas paints and coatings market in the short- and medium-term on the back of ambitious projects already underway or in the pipeline.