Nigeria’s rig count surge 25%, highest among OPEC members

Despite the scourge of Coronavirus raving activities offshore oil fields, Nigeria has the most impressive rig count among some of the biggest oil-producing countries in the world with a 25 percent increase, a development that an increase in the level of oil production activities.

Active oil exploration brings about a billion investments in the country’s economy as well as the development of related sectors of the economy and infrastructure. It also supplies new jobs for Nigerian citizens and improvement of social and living standards in general while absent of oil exploration implies the reverse of increased economic growth.

Data obtained from Baker Hughes Incorporated and Organisation of Petroleum Exporting Countries (OPEC) showed Africa biggest oil-producing country recorded 10 oil rigs in September, which was a 25 percent increase compared to the month of August, an indication of increasing exploration activities.

Rig count is largely a reflection of the level of exploration, development and production activities occurring in the oil and gas sector.

“Most of the oil rigs affected by coronavirus pandemic are beginning to come back to operations, which will translate to higher production,” Niyi Awodeyi, CEO at Subterra Energy Resources Limited said.

Offshore production accounts for more than 60percent of Nigeria’s 2.10 million to 2.20 million bpd crude and condensate output.

“The logic is straightforward. When the number of oil rigs rises, it means more people can be employed, when it drops, it means loss of employment opportunities,” Awodeyi said.

Nigeria’s increase in rig count came at a time the Organisation of Petroleum Exporting Countries (OPEC), recorded a 14 percent decline in rig count to 363 in September compared to 377 recorded the previous months, according to the latest OPEC monthly oil market report.

Among the OPEC members, Nigeria had the most inspiring rig count of plus 2, followed by Saudi Arabia, which also recorded two addition rig count. Angola added just one additional rig counts while other members suffered either reductions in rig counts or zero rig counts.

For Nigeria, an increase in rig count comes at a time when Nigeria’s toiling hard to ensure full compliance to the OPEC+ deal which hangs on a key oil grade being treated as a condensate, a development needed to save battered oil price.

Ever since OPEC+ allowed ultra-light oil to be exempt from its production cut deal, the West African nation’s Agbami has been a bone of contention.

Nigeria’s oil ministry officials are asking international oil companies like Chevron and Equinor to reclassify Agbami as a condensate rather than a crude but the field’s partners are not on the same page.

Chevron, which operates the Agbami field and FPSO, have always listed the grade as a crude on their website, and markets it as light, sweet crude oil to its customers.

Similarly, equity partner Equinor also classifies the grade as a light, sweet crude, according to its website.

Trading sources have told S&P Global Platts that the grade is marketed as a light, sweet crude, as it is not derived from a gas condensate field.

Lagos-based Famfa Oil, which also holds a stake in the oil field, has also termed it as a crude oil on its website.

Agbami has an API of over 47.9 degrees and a sulfur content of 0.04percent, with production ranging between 160,000 b/d and 250,000 b/d in the past 12 months, according to Platts estimates. Agbami is a popular grade among global refiners, and is regularly exported to a wide array of countries like India, Australia, Spain, the Netherlands, China, Brazil.

Nigeria depends on oil sales for around 60percent of its revenue and 90percent of its foreign exchange earnings, though it only accounts for less than 10percent of GDP, according to the International Monetary Fund (IMF).