Nigeria’s Oil Rig Count Reaches Highest Level Since 2020

Nigeria’s oil rig count has increased to 13, its highest level since January 2020, according to a new report from the Organization of the Petroleum Exporting Countries (OPEC).

The rise in the country’s oil rig count by 85.7 percent from seven in September to 13 last month is due to an increase in investment in upstream exploration and demand for crude globally, Investors King reports.

Experts attribute the increase in oil rigs to the passing of the Petroleum Industry Act (PIA) in 2021, which introduced fiscal changes and incentives for the industry. The favorable fiscal regime under the PIA will allow upstream operators to enjoy higher fiscal rewards based on higher production volumes, which will attract more investment in oil exploration.

The rise in oil rig count will have a positive effect on Nigeria’s economy, with the contribution of the oil sector to the country’s Gross Domestic Product (GDP) expected to grow. More exploration activities are expected to occur, and Nigerians can expect an even bigger boost in investment in the oil and gas sector.

The offshore drilling company, Dolphin Drilling, secured a $96 million contract to provide a drilling rig for an oil asset in offshore operations in Nigeria, which will expand offshore assets in the country. The increase in oil rig count also means that more in-fill wells were drilled from existing oil fields during that period.

Nigeria’s offshore industry will maintain the momentum of drilling activity it saw in 2022, with five offshore rigs scheduled to be active in the country this year. The increase in drilling activity offshore Nigeria since 2022 is expected to continue well into 2023, according to industry experts.

The increase in the oil rig count in January is linked to the increase in oil production during that period. Nigeria’s oil production increased by 23,000 barrels per day (bpd) to 1.258 million bpd in January, the highest since January 2022.