Nigeria’s oil exploration starts to slow down as the number of rigs declines.

Ibekimi Oriamaja Reports

According to the Organization of Petroleum Exporting Countries, or OPEC, a new setback has occurred in Nigeria’s oil business as exploration suffers a decline in rig count to 10 in August 2022 from 11 reported in the previous month.

The global upstream sector of the petroleum industry uses the rig count as a key indicator of exploration and other activities.

This year’s rig count began at a low point of 6, but it progressively increased to 11 in April and stayed there until July before experiencing a setback.

The organization’s September 2022 Monthly Oil Market Report, MOMR, did not mention the causes of the decline in exploration.

It did, however, show that operators—including IoCs and their local equivalents—did not make significant investments in oil exploration during that time.

It also indicates that the expected favorable effects of the Petroleum Industry Act, or PIA, on investment, exploration, and production have not yet materialized.

However, the survey revealed that Algeria had the largest rig deployment, with 33, while Equatorial Guinea had none at all.

The National President of the Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, commented on the move and said it will take some time for the PIA’s effects to be seen by the industry.

He claims that the sector needs long-term investment and the mobilization of resources, including cash from both inside and outside the country.

It would take some time to see the benefits of the PIA, particularly in terms of oil and gas development and production, he said. While some investments are already being undertaken, they won’t immediately result in significant oil and gas discoveries or output.

Dr. Amieyeofori Felix, the lead advocate for Energyhub Nigeria, also highlighted that the PIA’s beneficial effects would come gradually.