Nigeria’s oil exploration begins to decline as rig count falls

Nigeria’s oil exploration begins to decline as rig count falls

A new setback has emerged in Nigeria’s oil industry as exploration suffers drop in rig count to 10 in August 2022, from 11 recorded in the previous month, according to the Organisation of Petroleum Exporting Countries, OPEC.

The rig count is a major index of measuring exploration and other activities in the upstream sector of the petroleum industry globally.

The rig count had started this year from a low point of 6 but progressed steadily to 11 in April which it sustained till July before the setback.

The organisation did not disclose the factors responsible for the drop in exploration in its September 2022 Monthly Oil Market Report, MOMR, obtained by Vanguard yesterday.

However, it indicated that operators, including the International Oil Companies, IoCs and their indigenous counterparts, did not invest much in oil exploration during the period.

It also means that the impacts of the Petroleum Industry Act, PIA, expect to be positive on investment, exploration and production has not yet been felt.

However, the report showed that Algeria was the highest deploying nation with 33 rigs while Equatorial Guinea came last with no rig whatsoever.

Commenting on the development, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said it would take some time for the impact of the PIA to show on the industry.

According to him, the industry requires long term investment and mobilisation of resources, including funds from within and outside the nation.

He said: “It would take a relatively long time to reap the fruits of the PIA, especially in terms of oil and gas exploration and production. Some investments are currently being made, but they would not amount to major oil and gas finds and output immediately.”

The Lead promoter, Energyhub Nigeria, Dr Amieyeofori Felix, also noted that the positive impact of the PIA would be gradual.

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