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Despite Muffled Oil Output Growth, Nigeria’s Rigs Count Rises 116% in One Year
Emmanuel Addeh in Abuja
In spite of subdued growth in Nigeria’s oil production in the last one year, the country’s rigs count rose markedly from six to 13 between January 2022 and the same period in 2023, new industry data obtained from Baker Hughes, has shown.
At a current level of 13, up from 12 the previous month of December and up from six one year ago, it marked a significant change of 8.33 per cent from last month and a whopping 116.7 per cent from one year ago.
A THISDAY review of the data indicated that the figures also align with new information from the Organisation of Petroleum Exporting Countries (OPEC), in its latest Monthly Oil Market Report (MOMR) released this February.
Further checks revealed that the number of rigs could even hit 14 by March, when offshore drilling contractor, Dolphin Drilling, which currently has one of its semi-submersible rigs on its way to Nigeria, will start its new drilling campaign.
It was also gathered that the Blackford Dolphin had departed Las Palmas and was already en route Nigeria, following a successful shipyard campaign, which enabled the recertification for a further five years.
Although Nigeria’s oil output had begun to rebound since October last year, after a multi-decade low of 900,000 bpd, however the rate of growth slowed in January, with a meagre 28,000 barrels per day increase during the month.
The figure was lower when compared to the over 55,000 bpd increase in December, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
While production in December, the previous month, was 1.235 million bpd, the January oil output was 1.258 million bpd, THISDAY reported.
But it was still significantly lower than the about 1.8 million bpd OPEC production allocation to Nigeria, which the country has been unable to meet for over a year.
This has hobbled the country’s main source of foreign exchange and put immense pressure on the local currency, the naira, against the American dollar.
According to the Baker Hughes data, in January 2022, Nigeria’s oil rigs were six, but rose to eight in February and then to 10 in March. It stated that this figure increased and remained stagnant at 11 in April, May, June and July respectively.
In addition, as Nigeria’s oil production struggled, the country’s oil rigs count fell further to 10 in August and dipped even further in September to seven and eight in October.
But as the country’s production started to improve in November 2022, the rigs count increased to 10, before shooting up to 12 and 13 in December 2022 and January, 2023 respectively.
In other years, a THISDAY analysis revealed that Nigeria’s oil rigs count fell from 16 to eight between 2019 and 2022, underscoring the magnitude of challenges the country has faced in producing its OPEC monthly allocation.
The MOMR showed that while the average rigs count was 16 in 2019, it fell to 11 to 2020, and then further to seven in 2021.
In the first quarter of 2022, the count was eight, it was 11 in the second quarter of the year, and again fell to nine in the third quarter this year, according to the OPEC data.
But the Nigerian National Petroleum Company Limited (NNPC) has put current production at over 1.6 million bpd, although traditionally OPEC and NUPRC are the bodies that release production figures.
In recent times, the country’s active rigs had progressively decreased, but was made worse after Nigeria began shutting down many of its offshore platforms as oil prices took a downward slope and the producers’ group embarked on production curbs to stabilise the market in 2020, following the upsurge of the Covid-19 pandemic.
Furthermore, there has been massive underinvestment in the sector, leading to depleting oil rigs.
Despite the remarkable recovery in global crude oil demand, Nigeria had been unable to ramp up production, following massive theft of the resource in the Niger Delta as well as shutdowns due to frequent equipment failure.
In the oil and gas industry, the rig count is a major index for measuring activities in the upstream sector.
While for instance, 26 rigs were in operation, on both onshore and offshore terrains, in 1997, Nigeria has had the number remarkably depleted in recent years.
The Nigeria Extractive Industries Transparency Initiative (NEITI) revealed sometime ago that in the period spanning between 2009 and 2020, Nigeria lost as much as 619.7 million barrels of crude oil valued at N16.25 trillion to oil theft.
The losses were from theft and sabotage, based on information and data provided by an average of eight companies covered by NEITI process over the years, the organisation said.
A breakdown of the losses, it said, showed that in 2009 when NEITI commenced reporting of crude oil theft, Nigeria lost 69.49 million barrels valued at $4.31 billion.
It added that the figures for 2010, 2011 and 2012 revealed that 28.31 million, 38.61 million and 51.58 million barrels, which were valued at $2.29 billion, $4.39 billion and $5.82 billion were lost respectively.