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Nigeria’s oil rig count drops by 38% as NNPC spends N28bn searching for oil in 10 months

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Major setback awaits Nigerian economy as more foreign oil companies prepare to exit

Nigeria’s oil rig count has decreased by 38 percent to 80 in the first 11 months of 2021, from 129, recorded in the corresponding period of 2020.

This is according to latest report from the Organisation of Petroleum Exporting Countries (OPEC) obtained by Ripples Nigeria.

Oil rig count is a global index for measuring activities in the upstream sector.

OPEC data showed that under the period in review activities appeared on the low ebb in April with just five rigs in operation, but it quickly rose to 11 in August and September, before dropping consistently to seven in November 2021.

The organisation did not provide reasons for the sliding trend, but it is understood that it’s connected to limited investment, still haunting the industry.

Comparatively, some African nations, especially Algeria and Libya did well at 247 and 140 rigs respectively during the period.

This indicates that unlike Nigeria, they would likely build additional oil reserves, capable of leading to increased production capacity in the coming years.

Meanwhile, the Nigerian National Petroleum Corporation has revealed that in the first 10 months, N27.99 billion have been spent on frontier exploration services.

Frontier exploration is the process of exploring hydrocarbons (the exploration of crude oil, natural gas, coal, and other energy sources) in the inland basins.

The inland basins consist of the Anambra basin, the lower, middle, and upper Benue trough, the southeastern sector of the Chad basin, the mid-Niger (Bida) basin, and the Sokoto basin.

Read also: How Avengers’ suspension of hostility triggered gains in oil market

NNPC subsidiary the Nigerian Upstream Regulatory Commission manages the exploration.

In its latest FAAC report, NNPC reveals that N1.96 billion was spent in January, increasing to N1.92 billion in February.

In March N2.25bn was spent, In April no funds was committed.

The spending returned in May as N3.21bn was committed, June N2.71bn, July N2.44 billion, while in August N6.16bn was spent.

In September and October NNPC disclosed N4.02bn and N3.25 billion was spent respectively.

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