Nigeria’s oil industry is facing a stark reality check as it needs 45 new rigs to reach “normal” production levels of 2.1 million barrels per day (mbpd) by 2025, according to industry titan Austin Avuru, executive chairman of AA Holdings.
This stark warning highlights the challenges the country faces in revitalising its oil sector, a crucial engine for its economy.
“To arrest the natinural decline and add 800,000Barrels per day over two years will require 426 wells including 106 exploration and appraisal wells as well as 320 development wells,” Africa Oil & Gas Report, an energy intelligence publication by a respected analyst, Toyin Akinosho quoted Avuru as saying.
He added, “For this, 45 Rigs must be on duty, so the country needs an investment of $7.6Billion in well costs alone”.
Avuru’s statement, made at the recent National Association of Petroleum Explorationists (NAPE) conference, painted a picture of a sector struggling with declining production.
This stark reality check comes at a crucial time for Nigeria, where oil remains the backbone of the economy.
Recent production declines have had a ripple effect, squeezed government revenues and impacted foreign exchange reserves.
The pain of this large-scale theft and vandalism, as well as decades of under-investment in infrastructure, was so severe that last April, the country produced less than one million barrels of oil daily, far below its 1.8mn bpd Organisation of Petroleum Exporting Countries quota.
The country’s oil production improved to 1.37 million barrels per day in November, an OPEC survey, which cites secondary data sources, said. However, it is still not close to the 2024 budget benchmark of 1.78 million bpd.
