The Nigerian National Petroleum Corporation (NNPC) and its partners are set to pump more oil as Nigeria’s rig count which had maintained a decline since 2020, rose to 11 in August.N
Nigeria has been unable to meet the quota allocated to it by the Organisation of Petroleum Exporting Countries (OPEC), in the last few months, due to weakening infrastructure and difficulty in restarting oil facilities that were shut down because of the cuts in production assigned to the country.
However, latest data from the OPEC Monthly Oil Market Report (MOMR) shows that the country’s oil rigs have soared from a low of five in the second quarter of 2021, to 11, as of August. A further analysis of the data showed that while in 2018, the average rigs count was 13, it was 16 in 2019, but fell to 11 in 2020, a reduction by five oil rigs.
Since the third quota of 2020, the count had continued to slump, first to eight in that quarter, and seven in July, but with an addition of four rigs for the month of August, raising hope of more production.
Put side by side with a country like Algeria, the North African nation has a high of 50 and low of 21, while the United Arab Emirates (UAE), for instance, has a high of 62 and a low of 40.
In the oil industry, the rig count is a major index of measuring activities in the upstream sector, with a breakdown showing that Nigeria utilised six, seven, and six rigs in January, February, and March 2021, respectively, against 21, 23, and 21 used in the corresponding period of 2020, when production was about two million bpd.
Despite asking for a higher baseline, in June, July and August, Nigeria failed to meet the existing quota assigned to it by OPEC for the months, losing 90,000 barrels per day in the month of August alone. When cumulated for the entire month, this amounted to roughly 2.8 million barrels, making last month’s production of 1.43 million bpd one of the lowest in five years.
While Saudi Arabia and Iraq were the main drivers of OPEC’s production for August, with an additional production of 290,000 bpd and 200,000 bpd, respectively, Nigeria, which has a capacity to produce two million bpd, other things being equal, slumped from its July figure of 1.520 million bpd, according to an OPEC document.
Production growth in Nigeria, Africa’s highest oil producer, going by recent data, is proving a major challenge due to infrastructure challenges and technical difficulties, leading to shut-ins.
In addition to decreasing rig counts and highly degraded facilities due to old age and lack of investment, there have also been instances of community workers’ protests, which incessantly disrupt operations, leading to severe losses.
