June 9, 2009

No rigs operating onshore Nigeria

By Hector Igbikiowubo
INVESTIGATIONS have  confirmed that there are no rig operating onshore Nigeria at the moment, while only 20 are operating offshore, underscoring a steep decline compared to same period last year when more rigs were operational.
It was gathered that of the 20 active rigs offshore, one is a jack-up rig operating in swamp, while the rest are operating in safer shallow and deep water.

*The Total operated Apko FPSO project with proven reserves well in excess of 620 million barrels was inaugurated at the weekend.

*The Total operated Apko FPSO project with proven reserves well in excess of 620 million barrels was inaugurated at the weekend.

Essentially, the oil industry has come to a standstill owing to the security situation in the Niger Delta and operators inability to get rig contractors to mobilise to site.

Indications are that the lack of activity in the swamp would affect the reserve replacement rate of the three major onshore producers: Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited (CNL) and Nigeria Agip Oil Company (NAOC).

Menas Nigeria Focus, an oil and gas journal operating from the UK disclosed that while the swamp location holds Nigeria’s largest volume of proven reserves, the rig count indicates development expenditure.

when contacted, an official of the Department of Petroleum Resources (DPR) disclosed that 75 rigs were operating in the country in the 2nd and 3rd quarters of 2008, up from 37 in the first quarter of that year even though only 10 permits were issued during the period under review.

When contacted, the National Investment Management Services (NAPIMS), a subsidiary of the NNPC claimed that rig count in the country has risen to 24.

Vanguard gathered that the decline in oil exploration and production activities also underscores the multinationals’ decision to reign in expenditure until there is a clearer picture of government’s reform agenda, while on another front, smaller players are having difficulty securing field development financing.

Dr. Mohammed Baru, Group General Manager of NAPIMS told Menas that the operational rigs in the industry were working on projects approved for the 2008 financial year, adding that 11 rigs were working on 12 wells under production sharing contracts, while 13 were operational on 13 wells under joint venture contracts.

Checks revealed that 5 of the active rigs under production sharing contracts were working on 3 wells for Addax, while SNEPCO (Shell) and Total Upstream Companies each had one active rig working on 2 wells.

Stardeep (Chevron), ESSO (ExxonMobil), NAE (Agip) and sterling each have one rig operating in one well. Under the Jvs, NAOC had four active rigs operating in four wells followed by Mobil Producing and Total Exploration and Production each with three rigs in three wells.SPDC had two rigs in two wells, Chevron one rig in one well.