Lack of incentives from government, delay in passage of the Petroleum Industry Bill (PIB) among many other factors is taking its toll on Africa’s biggest oil producing country as the country’s rig count is nearing an all time low.
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 has been hovering around 14 rigs count, a sharp decline from a three-year high of 35 rigs count recorded in February 2018.
Wunmi Iledare, Ghana National Petroleum professor and chair, University of Cape Coast’s Institute of Oil and Gas, said a number of factors contributed to the decline in Nigeria’s rig count ranging from poor investment clouds due to lack of reforms, lack of passage of the petroleum industry bill (PIGB), and the need to renew some OMLs due for renewal.
“The activities levels in other places are higher because Nigeria has not given out any oil leases in recent times and, once the contract expires they (rigs) move to another location where they are needed,” Iledare told BusinessDay.
As at March 2018, Iran had the highest rig drilling activities of 157 rig count; followed by Saudi Arabia with 115 rig counts; while Iraq, United Arab Emirates (UAE) and Algeria all had 67 rig counts, 57 rig counts and 52 rigs counts respectively to make up the top five countries with the highest rig counts among OPEC members countries.
Also, Kuwait recorded 41 rig counts; Venezuela recorded 22 rig counts; Libya recorded 15 rigs counts; while Nigeria, Ecuador, Gabon, Angola, Congo, Equatorial Guinea had 14, 7,7,5,4 and 1 respectively to make up OPEC countries with the lowest number of rig count.
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.
The 14 OPEC members recorded a total of 564 rig counts in March as against 561 recorded the previous month with Algeria and Libya both recording the highest marginal increase of 8 rig counts and 6 rigs count respectively.
Non-OPEC members had a decrease of increase of 95 rigs, from 1,901 rig counts recorded in February 2019 to 1,806 rig counts recorded in March. World rig count also recorded a decrease of 92 rig counts, from 2,462 rig counts in previous month to 2,370 rig counts in March.