Rising rig count: A welcome recovery that must not be squandered

For an economy long dependent on oil revenues, Nigeria’s recent resurgence in drilling activity offers encouraging news. The active oil and gas rig count rose by 42 percent in May, increasing from 12 rigs in April to 17, while crude oil production exceeded the Organisation of Petroleum Exporting Countries’ quota of 1.5 million barrels per day for the first time in years.

This is more than another industry statistic. It signals renewed confidence in a sector that has endured years of underinvestment, insecurity, regulatory uncertainty and declining output. It also shows that when major constraints are addressed, Nigeria remains one of Africa’s most attractive energy destinations.

 “Nigeria must also avoid measuring success solely by production volumes. Producing more crude is important, but capturing greater value from the sector is even more critical.”

The recovery reflects several positive developments. One is the progress made in tackling crude oil theft and pipeline vandalism in the Niger Delta. For years, these problems discouraged investment because operators could not guarantee that production would reach export terminals safely. Reduced disruptions along key infrastructure, including the Trans Niger Pipeline and the Nembe Creek Trunkline, have helped restore investor confidence. The lesson is clear: secure assets attract investment.

Another important factor is the implementation of the Petroleum Industry Act. For decades, uncertainty over fiscal terms delayed major investment decisions, particularly in deepwater projects that require substantial capital. By providing greater regulatory clarity and more predictable investment conditions, the Act has begun to unlock new opportunities. Investors rarely expect perfect conditions, but they do expect consistency.

The growing role of indigenous operators is equally significant. Following the divestment of onshore assets by several international oil companies, Nigerian firms have assumed greater responsibility for production. Their expanding presence demonstrates that local companies can manage and grow mature assets while building stronger relationships with host communities. If supported with access to finance, technology and stable regulation, this transition could strengthen the long-term resilience of the industry. Indeed, the gains remain fragile.

A rig count of 17 marks progress, but it is still below the level required to sustain significantly higher production over time. Maintaining momentum will require continuous investment in exploration, field development and supporting infrastructure. Temporary improvements should not be mistaken for lasting success.

Security also remains a concern. While attacks on critical infrastructure have declined, many of the conditions that fuel unrest in oil-producing communities persist. Youth unemployment, environmental degradation and inadequate development continue to undermine stability. Security operations alone cannot guarantee lasting peace without meaningful economic opportunities for host communities.

Nigeria must also avoid measuring success solely by production volumes. Producing more crude is important, but capturing greater value from the sector is even more critical. For decades, the country exported crude while importing refined petroleum products at enormous cost. Long-term prosperity depends on expanding refining, petrochemicals, gas processing and other value-added industries that create jobs and retain more wealth within the economy.

Infrastructure reliability deserves equal attention. The recent production gains were supported by fewer facility shutdowns and pipeline disruptions. Sustaining that performance requires continuous maintenance and investment. Allowing critical infrastructure to deteriorate would quickly erode the progress achieved.

Ultimately, the success of Nigeria’s oil sector should not be measured by rig counts alone. Citizens are more concerned with jobs, reliable electricity, better roads, quality healthcare and improved living standards than production statistics. Increased output will matter only if the resulting revenues are managed transparently and invested productively.

The recent recovery is a welcome sign that Nigeria’s oil industry is regaining momentum. But history shows that temporary rebounds can easily be reversed. The task now is not simply to celebrate rising rig numbers but to ensure they become the foundation for sustained investment, industrial growth and shared national prosperity.