Nigerian oil exploration has witnessed a significant year-on-year (YoY) 22 percent drop due to low investment in the country’s upstream sector of the petroleum industry.
This was indicated by the Organisation of Petroleum Exporting Countries (OPEC), citing the number of rigs deployed for operations during the period.
In the latest Monthly Oil Market Report, OPEC indicated that on YoY basis, the nation’s oil exploration decreased by 22 percent in August 2024, as the rigs dropped for exploration dropped to 14, from 18 recorded in the corresponding period of 2023.
But on month-on-month, MoM basis, the nation’s oil exploration remained flat at 14 in August 2024, same as recorded in the preceding month of July 2024.
According to OPEC, Algeria emerged the highest nation in terms of exploration with 42 rigs while Equatorial Guinea came last with zero rigs.
Although OPEC did not provide factors responsible for the development, checks by Vanguard pointed to low investment in Nigeria during the period, characterized by continued divestment by the International Oil Companies (IoCs).
Nigeria has proven oil reserves of approximately 37 billion barrels of oil and 209 trillion standard cubic feet, Tscf of proven natural gas reserves.
Efforts targeted at increasing the 37 billion barrels of oil and 209 trillion standard cubic feet, Tscf of proven natural gas reserves have not been very successful for many years.
Meanwhile, the global oil market continues to be haunted by global uncertainties and geo-politics, making crude prices, including Nigeria’s Bonny Light to hover at more than $73 per barrel.
The government had based its 2024 budget on 1.7 million barrels per day and $77 per barrel for the execution of its budget.
However, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC which regulates activities in the nation’s oil and gas industry, said it has removed all entry barriers to attract massive investments.
The Commission Executive, NUPRC, Engr. Gbenga Komolafe, said this would culminate in growing oil and gas production, enhancing Nigerian Content Development, attracting Foreign Direct Investment, contributing to long-term global energy sufficiency, expanding opportunities for gas utilization, and creating employment opportunities while adding value to government and investors.
Similarly, the Executive Chairman, African Energy Chamber, NJ Ayuk, had said: “Nigeria has established a framework that is set to attract foreign exploration companies with modernised fiscals that are competitive for deepwater exploration. We believe the most lucrative balancing point between creating a welcoming environment for international companies and achieving Nigeria’s own national goals is important.
