For the second consecutive month, the number of active oil rigs in the country remained unchanged in May, amid record production of 1.024 million barrels per day (bpd) for the month.
Still grappling with production challenges, an audit by THISDAY showed that the only time in recent history that Nigeria has seen such abysmal drilling activity was in the heat of the Niger Delta crisis around 2016.
The latest figures from the Organization of the Petroleum Exporting Countries (OPEC) indicated that, as in April, the country was able to report 11 active oil rigs throughout the month.
Over the past few months, the country’s active rigs have gradually declined, but this worsened after Nigeria began shutting down many of its offshore rigs as oil prices took a downward slope and that the producer group had embarked on production restrictions to stabilize the market in 2020.
Historical rig count figures previously obtained by THISDAY showed that, for example, after OPEC’s directive for production restrictions in April 2020, in the heat of the pandemic, the following May 2020, the country’s producing oil rigs fell from 16 to eight and two months later, in July, it fell to six again.
In January 2021, only six rigs were produced while in February it was seven; in March it fell back to six, while in April 2021 the total number of platforms was only five. In the oil industry, the number of platforms is a major indicator for measuring activities in the upstream sector.
Also recently, a study by THISDAY showed that Nigeria was producing much less oil than 25 years ago, when the estimated population was lower than it is today and government spending was much lower than it was today. they were in 2022.
A comparison of the country’s average oil production per day in 1997, as reported in the NNPC’s annual statistical bulletin, showed that while Nigeria pumped 2.344 million barrels per day, plus condensate more than two decades and a half, this figure was halved last month.
Furthermore, while 26 rigs were in operation, both onshore and offshore, in 1997, Nigeria in January of this year had only about 12 active oil rigs, of which about half were not used, and fell to last 11 months.
But still in oil activities ahead of the month, Algeria, another African oil producer, increased its rigs by six to 34, to six, Angola remained unchanged, Iraq added two to reach 48 while Saudi Arabia increased its own rigs by eight to maintain its leadership at 78 rigs.
For non-OPEC countries, the United States had 719 oil rigs in May, up 25 rigs while Canada and Mexico had 93 and 43 active rigs respectively.
In total, with the latest figure released by OPEC, this means that Nigeria’s underperformance reached 700,000 barrels per day for the month, although the total cartel allocation to Nigeria exceeded 1.75 million. bpd for the month of May.
Production of 1.024 million bpd was about 195,000 bpd less produced compared to April’s total of 1.219 million bpd.
Despite assurances from various government agencies, what the OPEC figures imply is that instead of improving, the country’s oil production has actually deteriorated in recent months.
Pointing to mass theft as one of the reasons for its inability to meet its quota, the federal government also months ago deployed a heavy military presence in the Niger Delta to stem the threat.
But OPEC data has now confirmed that the action made no difference, as nothing appears to have changed since the reshuffling of security arrangements in the region.
There doesn’t seem to be any respite in sight with the current decline in investment as wealthy countries and renewable energy-minded investors continue to pressure multinational oil companies to stop funding new oil activities there. ‘foreign.
For years, Africa’s biggest oil producer has failed to significantly increase capacity despite promises that “we are doing everything” to increase production.
With more than 37 billion barrels of crude oil in reserves and an annual production of around 2% as well as a total life estimated at 50 years, if there are no new discoveries, Nigeria remains the one of the world’s largest oil producers ranked 15th.
Of the 1,735 existing rigs in the world, according to OPEC, 1,379 are oil, 328 are for gas while 28 are classified as other. OPEC has 13 members of which at least two are currently unrated due to political issues in their countries.
Generally, in the oil industry, higher oil prices, as is happening now, means higher rig counts, which also means higher production. In the opposite direction, lower prices mean fewer rigs and lower production. However, Nigeria currently lacks the capacity to increase production.
In addition to the positive correlation between the number of rigs and oil production, there are also many jobs associated with rigs when they are operational, which means fewer rigs, fewer jobs in the sector. tanker.
A recent document released by the upstream commission showed that while Nigerian platforms may reach 53, less than 20% of that number have been nearly active in the past few months, while 25 are on hold and 16 have been “stacked”. (may or may not be usable).
In terms of terrain, out of the 53 platforms, 33 are on land, 11 are at sea while nine are in swamps.
As major oil companies consider adopting renewable energy, the challenge of securing the necessary investment in a country like Nigeria, which is poorly rated for its business friendliness, could become even more difficult in the years to come, said recently reported THISDAY.