BusinessDay

Nigeria’s oil rig count rises to highest in four months

Nigeria’s oil rig count has increased for the first time in four months to eight, a 14 percent increase from the previous month, according to the Organization of the Petroleum Exporting Countries (OPEC) data.

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 the latest OPEC oil market report, the country’s oil rig count rose from seven in September to eight in October.

“This increment is a pointer to the fact that we are beginning to see more in-fill wells being drilled from existing oil fields – possibly some of the recently auctioned marginal oil fields,” Ndubuisi Okereke, a lecturer in the petroleum engineering department at Federal University of Technology Owerri, said.

“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.”

Jide Pratt, chief operating officer at Aiona and country manager of Trade Grid, attributed the increased rig count to the exploration activities that occurred in that month.

“The rig count increase should mean more production which sadly is not the case as our production seems to be dropping,” he said. “The strategy must be to enable higher rig count simultaneously with higher output.”

According to the OPEC report, Nigeria’s oil output increased by 77,000 barrels per day (bpd) to 1.014 million bpd, based on direct communication.

Read also: Nigeria’s oil rig count falls for first time in 2022

Also, the Nigerian Upstream Petroleum Regulatory Commission, in its oil production status report for October 2022, revealed that the country’s oil production increased to 1.02 million bpd.

Out of the 13 OPEC members, crude oil output increased mainly in Nigeria and Iraq, while production in Saudi Arabia and Angola declined.

Oyinkepreye Orodu, head of department, Petroleum Engineering at Covenant University, said Nigeria could gauge the prospect of an increase in future production and the level of current investment in the sector with the rig number.

“The oil rig number reflects or signifies ongoing exploration activities, and field development scenarios which may involve various good intervention schemes to boost production or drilling new infill wells to further improve oil recovery,” he said.

Last month, 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 this quarter.

Reports showed GHL has chartered the rig for up to 12 months, although it has the option to end the deal after six months.

Okereke said this development suggests that more exploratory drilling is beginning to happen offshore, expanding the offshore assets in the country.

Pratt added that the new contract means that the investment climate is hopeful and the government needs to keep working with the private sector and regulators.

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.

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