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The hunt for land rigs by Anglo-Dutch super major Shell, and Nigerian independent Seplat Petroleum, probably shows exploration and production activities are about to pick-up again after active rig count in Nigeria fell by half last year.
Shell is getting ready for a major drilling programme and has gone to the market for two jack-ups and a pair of land rigs, one of which will have to handle high-pressure, high-temperature wells. Seplat Petroleum is also searching for a land drilling rig for work on Oil Mining Licence (OML) 53.
As of June 2018, Africa’s largest crude producer had 32 oil rigs according to the Organisation of Petroleum Exporting Countries’ Monthly Oil Market Report (MOMR). But this has fallen to 14 rigs as of June 2019, according to the oil cartel’s latest July MOMR. This is more than a 50 percent decrease.
Rig count is a function of the level of exploration, development and production activities occurring in the oil and gas sector. A drop in active rig count means oil exploration and production activities in have decreased year-on-year.
“Both elements correlate. To replace oil reserves, you need to intensify exploration and production activities. This means more active rigs. It also means more investment inflows into Nigeria’s oil and gas sector,” one major contractor told BusinessDay in confidence. “Falling active rig count and reserves mean there have been no fresh investments in the sector.”
Nigeria’s oil reserve decreased to 36.247 billion in 2011 from 37.200 billion recorded in 2010, while in 2012 there was relative improvement to 37.139 billion but went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down to 37.062 in 2015 while in 2016 it stood at 37.453 billion.
However, at an … Read More...