• Friday, July 12, 2024
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Nigeria’s December oil rig count highest in 2022

Nigeria’s oil rig count rose 85 percent within the last six months to its highest level since January 2020, according to new data from the Organization of the Petroleum Exporting Countries (OPEC), signaling that Africa’s biggest oil producer is no longer going to be playing on the margins.

Nigeria’s oil rig count increased to 12 in December, a 71 percent increase from September last year, according to new data from the Organization of the Petroleum Exporting Countries (OPEC).

A rig count is a reflection of the level of exploration, development, and production activities occurring in a country’s oil and gas sector. Active oil exploration attracts investment and revenues into the country for economic growth.

According to OPEC’s latest market report, the country’s oil rig count rose from seven in September to 12 in December.

Etulan Adu, an oil and gas production engineer, said the increase in oil rig count is due to the rise in investment in upstream exploration and demand for crude globally.

“We should be expecting the oil rig count to keep rising due to the recent offer of seven offshore blocks by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that will attract more investment in oil exploration,” Adu said.

According to a recent statement by Gbenga Komolafe, chief executive of NUPRC, the bid for seven offshore blocks will grow the nation’s oil and gas reserves through aggressive exploration, and development efforts, boosting production and expanding opportunities for gas utilisation and development.

In October last year, Dolphin Drilling, a United Kingdom-based exploration company, secured a $96 million contract to provide a drilling rig for an oil asset in offshore operations in Nigeria.

According to the offshore drilling company, the charter deal with Nigeria-based General Hydrocarbons Limited (GHL) will see the Blackford Dolphin rig start operations in the fourth quarter of 2022.

The Blackford Dolphin is a semi-submersible drilling rig of an Enhanced Aker H-3 design built in 1974. The rig is a large structure with facilities to extract and process petroleum and natural gas that lie in rock formations beneath the seabed.

“This development suggests that more exploratory drilling is beginning to happen offshore, expanding the offshore assets in the country,” said Ndubuisi Okereke, a senior lecturer in the petroleum engineering department at Federal University of Technology Owerri.

Okereke said the increase in oil rig count means that more in-fill wells were drilled from existing oil fields during that period – possibly some of the recently auctioned marginal oil fields.

“The increase suggests that the fight against oil theft is yielding results, and some of our abandoned production lines are beginning to come on stream again. That is a welcome development,” Okereke said.

The rise in the oil rig count in December links to the increase in oil production during that period. According to OPEC, Nigeria’s oil production increased by 50,000 barrels per day (bpd) to 1.235 million bpd in December, the highest since March last year.

The 13-member oil cartel said in the report that crude oil output increased mainly in Nigeria, Angola, Libya and Venezuela, while production in Kuwait, Congo and Algeria declined.

Last month, Timipre Sylva, minister of state petroleum resources, said improved security surveillance along major crude oil pipelines is helping to shore up oil production from about 900,000bpd to between 1.4 million bpd and 1.6 million bpd.

Mele Kyari, group chief executive officer of Nigerian National Petroleum Company Limited, at the 13th Global UAE Energy Forum held recently, said by the end of December, Nigeria was pumping 1.519 million bpd.

Read also: Nigeria retains Africa’s top oil producer spot

According to a statement by Energy Connects, Nigeria’s offshore industry will also maintain the momentum of drilling activity it saw in 2022 with five offshore rigs scheduled to be active in the country this year.

The statement said both Shell and First E&P will complete their respective campaigns on Bonga (deep-water, OML 118) and Madu (shallow water, OML 85), but new programs are also on the table.

It said: “General Hydrocarbons has notably contracted the Blackford Dolphin for a drilling campaign at Oyo on OML 120, a shallow water field it hopes to quickly redevelop and put back on production.

“Also in shallow water, the Chevron Nigeria JV is currently seeking a rig to execute a 2-year campaign offshore Escravos starting mid-2023. More importantly, deep-water drilling is also on the table for TotalEnergies, with the major expected to execute an infill drilling campaign on its Egina and Akpo hubs on OML 130, although the rig is yet to be announced.”

“We are witnessing an upsurge in drilling activity offshore Nigeria since 2022 that we see continuing well into 2023,” Ibrahim Bello, managing director of Caverton Helicopters, a provider of offshore logistics services, was quoted as saying in the statement.

“Based on current appetite from shallow water and deep-water operators, we expect more drilling campaigns to be announced this year.”