Nigeria’s crude oil exploration has suffered a setback as the rig count, a global index for measuring activities in the upstream sector, decreased by 38 per cent to 80 in the first 11 months of 2021, from 129, recorded in the corresponding period of 2020, according to the reports of the Organisation of Petroleum Exporting Countries, OPEC.
During the period under review, activities appeared on the low ebb in April with just five rigs in operation, but it quickly rose to 11 in August and September, before dropping consistently to seven in November 2021.
Comparatively, some African nations, especially Algeria and Libya did well at 247 and 140 rigs respectively during the period, indicating that unlike Nigeria, they would likely build additional oil reserves, capable of leading to increased production capacity in the coming years.
He said: “The completion of work on the PIA is a welcome development for the oil and gas industry and the country at large as it will provide the long expected business and Investment environment for the oil and gas industry.
“Nigeria must ensure that we utilize the opportunities created by this Law to fully harness the total hydrocarbon value chain in order to generate the capital that will propel our Transition into the renewable world.”
He said: “The many foreign investors had before now gone to other nations, including Angola and Ghana, which had looked more attractive than Nigeria before the completion of work on Nigeria’s PIA.
“Now that the PIA is place, conscious efforts should be made to attract and retain foreign and local investors in the oil industry, particularly as it would lead to the creation of contracts, jobs, Local content and other multiplier effects.”
Similarly, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “We expect that the PIA, would impact positively on exploration.
“With the expected increased investment, the nation’s production should rise in the medium and long term, thus enabling the country to meet higher OPEC quota in future. Remember, there was a time Nigeria had the capacity to produce up to 2.5 mb/d. It was increased hostility in the Niger Delta and other factors that culminated in low output.”
However, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has called for synergy and collaboration among stakeholders in the industry.
In a statement obtained by Vanguard, Chief Executive Officer of NUPRC, Mr. Gbenga Komolafe, said the PIA, which was signed into law after almost two decades has created a clear fiscal and regulatory framework for the industry.
He said the objective of the Act was to attract investments to Nigeria’s oil and gas sector and optimise the nation’s hydrocarbon resources for national development.
According to him, the PIA was aimed at increasing the nation’s oil and gas reserves and reduction in operating costs in the country.
Komolafe, who had held several engagements with stakeholders in the industry since assuming office, noted that the effective implementation of PIA was very important to the Muhammadu Buhari-led administration.
“We must continue to collaborate, synergise, and build partnerships across all agencies of government and our stakeholders, for the purpose of innovation, data gathering, information sharing and to breach specialized human capacity gaps among others, as these are positive drivers to improve local human capacity for Nigeria,” he said.
He also said the commission has the responsibility of technical, operational and commercial regulation of upstream petroleum operations in Nigeria.
He maintained that the goal of the commission was to function as a 21st century regulator by promoting an enabling environment for investment in upstream petroleum operations.
Komolafe added that the Commission would however; ensure strict implementation of environmental policies, laws and regulations for upstream petroleum operations.