• Tuesday, October 03, 2023
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Rising rig count signals more upstream activity

Rising rig count signals more upstream activity

Nigeria’s oil rig count reached its highest level in three months, up 7.69 percent from the previous month, according to new data from the Organization of Petroleum Exporting Countries (OPEC), signalling increased upstream exploratory activity.

Rig counts are an important indicator of the nation’s oil and gas sector’s exploration, development, and production.

Nigeria’s oil rig count increased from 14 in July to 18 in August, according to the most recent OPEC oil market report. It increased by 28 percent year over year.

Kelvin Emmanuel, an energy expert and co-founder/CEO at Dairy Hills, said the increase in the rig count said sector reforms may have contributed to the rise.

“Recent changes including the government’s political will to combat organised crude oil theft from flow stations to terminals, particularly hot-pressure tapping from high-pressure pipes, may account for this,” he said.

Read also: Upstream regulator hosts communities to boost oil, and gas production capacity

Nigeria’s total crude oil production, both blended and unblended, along with condensate, demonstrated a commendable increase, reaching 1.41 million barrels per day (bpd) in August, 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 9.23 percent from 1.3 million barrels per day (bpd) in July of this year.

“The reality is that if these reforms are sustained, the rig count will rise as upstream companies commit more money to increasing output and abandoning divestment plans,” Kelvin said.

Globally, the offshore oil and gas sector is expected to grow at its fastest rate in a decade over the next two years, with $214 billion in new project investments planned.

Read also: Global upstream oil investment hits highest since 2014

According to Rystad Energy research, annual greenfield capital expenditure (capex) will surpass $100 billion in 2022 and again in 2023, marking the first breach for two years in a row since 2012 and 2013.

“As one of the lower carbon-intensive methods of extracting hydrocarbons, offshore operators and service companies should expect a windfall in the coming years as global superpowers try to reduce their carbon footprint while advancing their energy transition,” said Audun Martinsen, head of supply chain research at Rystad Energy.

According to the Rystad official, offshore oil and gas production isn’t going anywhere, “and the sector matters now, possibly more than ever.”