Nigeria’s Rig Count Drops By 67%

Nigeria’s rig count has dropped to five in April 2021, thus indicating a decrease of 67 percent compared to 16 recorded in the corresponding period of 2020, according to the Organisation of Petroleum Exporting Countries, OPEC.

In its May 2021 Oil Market Report obtained by Energy Vanguard, OPEC, also disclosed that the nation’s rig count, a major index of measuring exploration and production in the oil and gas industry, stood at six before dropping to the current five.

This means that the nation has not been investing adequate funds in new projects, capable of increasing its reserves, which the Department of Petroleum Resources, DPR puts at 37 billion barrels.

Commenting on the development, a Port Harcourt-based Energy Analyst, Dr. Bala Zaka, attributed the rig count to the inability of the nation to pass its Petroleum Industry Bill, PIB into law.

He said: “The delay in the passage of the PIB into law has not encouraged many foreign and indigenous companies to invest in new projects, which could have culminated into the making of new finds as well as commercial reserves.”

However, the report showed that the rig counts of other African countries remained much higher than Nigeria, meaning that such feats were fuelled by increased investments during the period. Specifically, Algeria and Libya led with 27 and 12 respectively, while Nigeria and Angola came third and fourth respectively during the period under review.

Nevertheless, OPEC disclosed that it was committed to promoting or encouraging investment in Nigeria and other member states.

In the upstream, it stated: “Regardless of all the challenges and uncertainties, OPEC Member Countries continue to invest in additional upstream capacities. On top of the huge capacity maintenance costs that Member Countries are faced with, they continue to invest in new projects and reinforce their commitment to the oil and gas market as well as to the security of supply for all consumers.”

Needless to say, this is only a reflection of OPEC’s well-known policy that is clearly stated in its Long-Term Strategy and its Statute. In the medium-term, about 160 projects, with an overall estimated cost of some $156 billion, are being undertaken by OPEC Member Countries.”

In the downstream, it also stated: “The upcoming projects landscape for the medium-term (2016–2021) for OPEC Member Countries’ downstream sector is affected by two factors: the lifting of international sanctions on Iran, and the return of Gabon to the Organization.

“A significant number of new investments are set to occur in OPEC Member Countries. “Almost 8 mb/d, of potential refining projects in OPEC Member Countries with a relatively new surge in capacity additions from Iran, if all projects are implemented as planned. “However, a review of viability of these projects suggests that around 2.2 mb/d of distillation units will be added to the refining sector in OPEC Member Countries in the period 2016–2021.

“This combines around 1.7 mb/d of additional crude distillation capacity and 0.44 mb/d in the form of condensate splitters.

“Condensate splitters additions are planned in Iran and Qatar and set to start falling off by 2020. The overall OPEC Member Countries’ distillation capacity (including splitters) is set to reach a level of 13.3 mb/d by 2021.