Oil & gas sector requires effective technology infrastructure. (Image source: Vertiv)
As with all modern industries, the oil and gas sector globally is under pressure to embrace the critical convergence of information technology (IT) and operational technology (OT) systems to maximise efficiencies and productivities
This shift is equally important in Nigeria, where the oil and gas industry plays a pivotal role in the national economy.
Oil production is a major source of income and a substantial contributor to the GDP of many African countries, and Nigeria remains consistently in the top spot as Africa’s largest producer of crude oil. In addition, it possesses significant quantities of natural gas reserves. The country’s oil and gas sector is critical to the economy, contributing over 85% of export earnings and approximately 30% of budget revenue, but it has been performing below its potential in recent years due to a number of challenges.
Against this background, the newly operational Dangote Refinery in the Lekki Free Zone outside Lagos, which began production in January 2024, is a positive symbol of the hoped-for revival of the oil and gas arena in Nigeria. This newest addition to Nigeria’s oil and gas industry is Africa’s biggest oil refinery and also the largest single-train facility in the world (meaning a facility where all the major processing units for the crude oil entering the refinery are contained within a single integrated complex).
However, despite the positive symbolism of this beacon within the Nigerian oil and gas realm, the sector is still navigating through the complex regulatory landscape and fiscal reforms introduced by the Petroleum Industry Act of 2021. The Act’s intention is to restructure fiscal terms, institutional frameworks and regulatory policies, and thus attract investment and boost efficiency.
Prior to the implementation of this Act, Nigeria’s oil and gas arena had seen years of under-investment in exploration and production which, together with persistent infrastructure issues and other challenges, had suppressed growth and innovation, as outlined by Nigerian credit rating agency Agusto & Co.
The implementation of effective technology infrastructure in the oil and gas field can help support strategic business and national objectives and assist in overcoming legacy infrastructure challenges.
Supporting key African markets in their digitalisation journeys
Vertiv is engaging with industry representatives within Africa’s largest oil producer, Nigeria, which also possessess substantial natural gas reserves. Nigeria’s natural gas reserves are, in fact, estimated to be one of the largest in Africa, as outlined by global research company, Mordor Intelligence, in its report entitled ‘Oil and Gas Industry in Nigeria Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)’.
Natural gas is considered a cleaner and more environmentally friendly source of energy compared to other fossil fuels, and investments in natural gas infrastructure would allow Nigeria to diversify its energy mix and meet both domestic and international demand for cleaner energy sources.
According to the Mordor Intelligence report, it appears that, considering the issues holistically and despite certain challenges, there is much to anticipate for the growth of Nigeria’s oil and gas industry over the next few years. One important key is enabling the true convergence of IT and OT systems, to be able to ‘mine’ facts and data as well as oil and gas, and thereby drive informed planning and decision making.
This is the first of a two-part article by Gary Chomse, regional director, Central-Southern Africa at Vertiv
