Nigeria’s offshore rig count from June till September has reduced to
seven from 11 recorded as at end first half 2016, H1’16, indicating that
four rigs were shut down in third quarter, Q3’16, Baker Hughes, global
oil industry data and information company stated in its oil data report.
This is coming as Baker Hughes reported that the international offshore
rig count for September 2016 was down by 47 rigs
The data stated
that funding cuts by the Nigerian National Petroleum Corporation, NNPC,
and growing security concerns may have triggered a significant drop in
the number of offshore oil rigs involved in drilling operations.
The
report is, however, not in tandem with the latest (September)
Organisation of Petroleum Exporting Countries, OPEC data which stated
that Nigeria’s oil rig count remains unchanged as it stood at 24 both in
June and July.
Chairman of Nigeria’s chapter of the International
Association of Drilling Contractors (IADC), Mr. Sola Falodun, explained
that budget cuts by NNPC due to cash crunch and non-payment of its
joint venture funding sent a negative signal to the international oil
companies.
“As soon as the cuts were made, companies who operate Joint Ventures
with the NNPC, including Mobil Producing Nigeria, Agip Oil, (subsidiary
of ENI), and Shell Petroleum Development Company reacted by dropping
rigs.”
According to him, the implications of the budget cuts
include loss of jobs, negative impact on capacity development, drop in
crude and gas production and less than rapid increase in reserves
replacement.
He further said that the IADC is concerned the
development coupled with the non-passage of the Petroleum Industry Bill
(PIB), “will render the goals of Nigerian content initiative ineffective
with regard to utilization of drilling rigs. The situation looks
bleak.”
According to Falodun, “There are 34 rigs currently
domiciled in the country, involved in drilling, cementing, completing,
moving from one location to another (rig move), undergoing maintenance,
involved in wire-line logging, doing well control, reaming, casing, and
even suspended operations. Out of this figure, eleven are involved in
drilling, eight were completing, three cementing and casing, and one was
logging”
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