• Tuesday, April 16, 2024
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Nigeria’s oil rigs rise by 23% on gains of PIA

Nigeria’s oil rigs rise by 23% on gains of PIA

In a continued upward trajectory witnessed in oil and gas exploration activities, the rig count, an index measuring upstream activities, surged by 23 percent year-on-year (YoY) to 16 rigs in February 2024.

This leap marks a considerable increase from the 11 rigs recorded during the corresponding period in 2023.

According to the March 2023 Monthly Oil Market Report (MOMR) released by the Organisation of Petroleum Exporting Countries (OPEC), the momentum of exploration also showcased a modest month-on-month (MoM) growth of 6 percent, with the count rising from 15 rigs in January 2024.

Explaining the driving forces behind this sustained surge in exploration activities, Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), attributed it to the positive impact of Nigeria’s recently enacted Petroleum Industry Act (PIA).

“The PIA is positively impacting as it provides institutional governance, efficient administration, and attractive fiscal regimes while providing for host communities, thus creating a peaceful atmosphere for investment and operations.”

However, the increase in upstream activities did not translate to more crude production as Nigeria’s output for the month declined to 1.32 million barrels per day (mbpd), compared to its January output, which stood at 1.46 mbpd.

The decrease of approximately 140,000 barrels per day highlights challenges faced by the Nigerian oil industry, including infrastructure constraints, security issues in oil-producing regions, and operational disruptions.

Meanwhile, in a strategic move aimed at further enhancing exploration efforts, Komolafe announced a significant partnership with TGS-Petrodata to acquire approximately 56,000 square kilometres of 3D Seismic Gravity data.

This initiative, focused on the Niger Delta deep and Ultra Deep Offshore regions, aims to mitigate risks associated with exploration in challenging environments, particularly in water depths ranging from 40 to 4,000 metres.

“The government will not bear the costs of acquiring this data; instead, investors will finance the initiative, with resultant revenues to be shared between the government and TGS,” he added.

Looking ahead, Komolafe expressed optimism regarding the prospects for sustained growth in oil exploration activities throughout 2024.

He revealed that the agency has finalised plans to conduct an oil licensing round, a pivotal step in the implementation of the nation’s PIA.