OIL & GAS EXPLORATION: Nigeria’s rig count drops by 58.8 % to 7
By Eyo Nsima
The Organisation of Petroleum Exporting Countries, OPEC, has put Nigeria’s rig count, a major index of measuring oil and gas exploration and production in December 2020 at seven.
This showed a drop of 58.8 per cent, when compared to 17, recorded in the corresponding period of 2019.
It also indicated that the nation did not invest much funds to boost exploration and production of oil and gas during the period, meaning that the reserves could be depleted much earlier than expected.
However, Nigeria had planned to increase its oil reserves from the current 37 billion barrels to 40 billion barrels by 2020.
With the prolonged inability to pass its Petroleum Industry Bill, PIB, required to attract many local and international investors into business, low oil prices and other problems, the target has been shifted to 2025.
Commenting on the development, Victoria Ibezim-Ohaeri, Executive Director, said: “Nigeria needs to pass the PIB as soon as possible to ensure the country gets the maximum benefits from its petroleum resources. Crude oil dominates Nigeria’s economy, accounting for around 80% of export earnings. Nigeria has the largest oil and gas reserves in sub-Saharan Africa with an estimated 37bn barrels of oil and 188 trillion cubic feet of gas.
“Yet for decades, the virtually ungovernable industry has been plagued by poor leadership, eye-watering corruption, and environmental degradation. Nigerian administrations since the 1960s have – with varying degrees of effort – failed at reform. In the last 20 years, multiple governments have attempted to pass an all-encompassing Petroleum Industry Bill (PIB), the scope and complexity of which has ensured repeated failure.
“The extant regulatory framework of the oil and gas sector which includes the Ministry of Petroleum Resources, NNPC Act 1997, the Petroleum Act 1969, the Oil and Pipelines Act 1990, the Petroleum Profit Tax Act 1959, the Petroleum Products Pricing Regulatory Act 2003 amongst others have had a more ruinous effect on the oil and the gas sector, as they have not promoted a culture of transparency in the oil and gas sector. They have also not created the right opportunities to tackle gas flaring, oil spillage, and Illegal bunkering in Nigeria.”
She added: “The Petroleum Industry Bill (PIB) seeks to increase government revenue from oil, and as well lay down a strengthened legal and regulatory framework for the Nigerian oil industry, set up structures for the establishment of commercially driven petroleum entities; and promote transparency in the administration of Nigerian petroleum resources. Succinctly put, the bill seeks to address the problem of administering petroleum resources in line with global best practices, and to provide for efficient and independent sector regulation.”
