• Friday, March 29, 2024
businessday logo

BusinessDay

Nigeria’s oil rigs stagnate as OPEC records decline

oil wells

Latest data from Organisation of Petroleum Exporting Countries (OPEC) reveals Nigeria rig count remains static at a time the 14-member cartel recorded a decline of 13 rig counts while globally rig count increase by 32.

Read Also: Why Nigeria oil rigs might be nearing an all time low

Oil and gas rig counts are frequently used throughout the oil and gas industry as a metric of consumer confidence; it indicates willingness for oil and gas companies to continue investing while also signifying the actual activity within the current market.

Data obtained from Baker Hughes Incorporated and the Organization of Petroleum Exporting Countries (OPEC) showed since the beginning of 2019 Nigeria’s oil rig, which is a reflection of the level of exploration, development and productive activities occurring in the oil and gas space remained static in the month of August at 15 rig counts and still a sharp decline from a three-year high of 35 rigs count recorded in February 2018.

Abayomi Fawehinmi, an energy analyst in a Lagos based oil firm said oil rigs are indications of drilling activities going on in a country’s oil sector however it can be very dodgy at times.

“Some rigs are like beasts and drill faster, cheaper and better than the others while some other rigs can also be docile,” Fawehinmi said.

Fawehinmi noted that global fall in rig counts indicated investors have a low amount of faith in the oil and gas industry.

As at August 2018, Iran had the highest rig drilling activities of 157 rig count; followed by Saudi Arabia with 114 rig counts; while Iraq, United Arab Emirates (UAE) and Algeria all had 77 rig counts, 63rig counts and 44 rigs counts respectively to make up the top five countries with the highest rig counts among OPEC members countries.

Also, Kuwait recorded 47 rig counts; Venezuela recorded 25 rig counts; Libya recorded 16 rigs counts; while Nigeria, Ecuador, Gabon, Angola, Congo, Equatorial Guinea had 15, 8,6,4,3 and 1 respectively to make up OPEC countries with the lowest number of rig count.

The 14 OPEC members recorded a total of 580 rig counts in August as against 580 recorded the previous month with Algeria recording the highest marginal increase of 3 rig counts.

NON-OPEC members had a decrease of increase of 22 rigs, from 1, 804 rig counts recorded in July 2019 to 1,782 rig counts recorded in August. World rig count also recorded a decrease of 32rig counts, from 2,394 rig counts in the previous month to 2,362rig counts in August.