Global demand for Oilfields Services (OFS) has been on a steady decline, and this has continuously challenged the oil industry in Nigeria. Oil represents over 80% of Nigeria’s exports, 30% of its banking-sector credit, and 50% of overall government revenue.
Due to low prices and the looming COVID-19 pandemic, the economy has been affected, leading to limited and postponed activities towards large oil discoveries within the country. According to the World Bank, the collapse in oil prices accompanied by the COVID-19 pandemic is predicted to plunge the Nigerian economy into acute economic recession, the worst since the 1980s.
Government revenues are expected to fall from an already low 8% of GDP in 2019 to a projected 5% this year due to the decline.
It is estimated that Global demand for oilfield services (OFS), measured in the total value of exploration and production (E&P) company purchases, will drop by 25% because of the downturn caused by COVID-19, leading to low oil prices.
Apart from the Nigeria Liquefied Natural Gas train seven project, no major projects or investments are forthcoming. The demand for oilfield services has declined terribly, oilrigs contracts have been postponed and many contracts cancelled.