Business

Nigeria shuts down 4 offshore oil rigs in 4 months, refuses to give reasons

An international oil outfit, Baker Hughes, has noted that Nigeria has consistently shut down its offshore oil rigs from 12 to 8, recording four shutdowns between June and September 2016.

This was being done without official reason given to marketers and other stakeholders in the industry.

However, industry watcher say growing security concerns may have been a major factor.

Baker Hughes latest data gathering report, covering major oil producing countries of the world, released on Monday, said Nigeria is among the oil producing countries to have been in the forefront of shutting offshore rigs,

The report further stated that there was a global reduction in offshore oil rigs, from a total of 2,500 to 2,403 by September 2016, down by 47 rigs, or 1.8 per cent.

But in reply to inquiries made by the International Association of Drilling Contractors (IADC) on the reduction, it was learnt that NNPC gave no reason, yet it did not deny that there had been a constraint of inadequate cash with which to fund rig operations as was the case before the country slipped into recession.

Read also: Recession forces Cross River to slash 2016 budget by N44bn

The IADC local chairman, Mr. Sola Falodun, throwing more light on this, stated that his association learnt from the NNPC that budget cuts, due to cash crunch, leading to non-payment of its joint venture with international oil companies is the reason.

He said some oil majors, including Mobil Producing Nigeria, Agip Oil, (subsidiary of ENI), and Shell Petroleum Development Company had dropped some rigs resulting in loss of about 35 percent jobs in the sector and other negative impact on growth of the economy.

There are a total of 34 rigs currently domiciled in the country in use for many oil exploration activities, including drilling completing and mobile rigs.

Of the total of the figure, only 12 are involved in offshore drilling.

By Emma Eke…..

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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
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Ripples Nigeria

We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears.
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