Nigeria’s oil industry is experiencing a positive upturn as the country’s oil rig count reached its highest point in three months, increasing by 7.69 percent compared to the previous month, according to data from the Organization of the Petroleum Exporting Countries (OPEC).
The rig count is a crucial indicator of exploration, development, and production in the nation’s oil and gas sector. Increased exploration attracts investments and drives economic growth.
According to the latest OPEC oil market report, Nigeria’s oil rig count rose from 13 in May to 14 in June. On a year-on-year basis, it increased by 27.27 percent.
“The increase in the rig count that shows investments International Oil Companies (IOCs) are making offshore in production is an indication of the impact of recent changes, especially as it regards the unification of exchange rates and the implementation of unitisation for measuring output by the regulator,” Emmanuel, energy sector expert and co-founder/CEO at Dairy Hills, said.
“Other recent changes include the political will of the government to tackle organized crude oil theft from flow stations to terminals in most especially hot-pressure tapping from high-pressure pipes.”
Nigeria’s total crude oil production, both blended and unblended, along with condensate, demonstrated a commendable increase, reaching 1.473 million barrels per day (bpd) in June, as reported by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Data from the upstream regulatory body reveals that the country’s oil production increased by 3.14 percent from 1.42 million barrels per day (bpd) in May of this year.
On a year-on-year basis, production saw a 4.93 percent rise from 1.40 million bpd, indicating the ongoing positive trajectory of Nigeria’s oil industry.
“The fact that Nigeria’s daily output at 1.47 million bpd has now exceeded the OPEC output given is another indication of why the Nigerian government needs to revise its membership in OPEC and focus on raising its output to 3 million bpd within the next 36 months so that it can stay within the declaration of cooperation with non-OPEC members,” Emmanuel said.
“The reality is that if these reforms are sustained, the rig count will continue to rise as upstream companies commit more money to increasing output, and shelving their plans for divestment.”
According to Emmanuel, the question is, what happens to storage at export terminals, when the daily output outstrips the ability to export to off-takers as well as hold in throughput?