The Organization of Petroleum Exporting Countries, OPEC’s monthly oil market report reveals that Nigeria’s oil rigs count has dropped by 50% in three years.
This was even as eight oil rigs out of 16 stopped production between 2019 and 2022.
Within this period, Nigeria has been struggling to meet up with OPEC’s monthly allocation of crude production due to man-made activities such as oil theft and institutional decay in the sector.
According to the Report, the continuous decline in rig counts from 2019 when the average rig count was 16 fell to 11 in 2020, and further dipped to seven in 2021.
Analysis of the report shows a glimmer of hope in the first quarter of 2022 when the rig count jumped to eight with the revival of one rig.
The second quarter showed better prospects as the rig count jumped to 11 showing a 120% increment when compared on a year-on-year basis, from five recorded in the corresponding period of 2021.
According to the OPEC report, there was further decline as it fell to nine in the third quarter of 2022.
The rig count witnessed another drop as it fell to seven in September and in October, gained a figure as it rose to eight.
From January to October 2022, Nigeria’s oil production averaged 1.34 million barrels per day, with the steady decrease in rig counts, the country has also witnessed a shortfall of over $15 billion in estimated earnings from losses incurred from under-production.
The 2022 Budget benchmark was fixed at 1.88 million barrels per day, calculating the shortfall, about 161.58 million barrels have been in lost and with the crude oil price of $95 per barrel, it means the country had lost about $15.5 billion.