The Organisation of Petroleum Exporting Countries (OPEC) has said that the number of active oil rigs in Nigeria declined by 30% in October, with the rig count falling to seven in October from 10 in September.

The rig count is largely a reflection of the level of exploration, development, production and general activities taking place in the oil and gas sector.

Stakeholders attribute the reduction in rig count to the lull resulting from scanty activities going on in the oil and gas industry, as well as the displacement going on against oil globally which tapes off on viability.

[Also Read] Oil exploration Suffers Setback as Nigeria’s Rigs fall 33%

A recent OPEC data Nigeria’s rig count stood at 21 as at March 2020, shortly before the effective arrival of COVID-19 pandemic to the shores of Nigeria, and the toll against the oil industry commenced.

The collapse in crude oil demand and prices occasioned largely by the coronavirus pandemic has forced many operators to put exploration on the back burner.

Many exploration and production companies have complained that drilling of oil wells have been suspended, with all non-essential capital expenditure under review.

[Also Read] Nigeria, other OPEC nations gasp for technology, investment in oil, gas

Participants at the Nigerian Association of Petroleum Explorationists warned that the continued reduction in oil and gas exploration activities in Nigeria would have huge consequences for the country.

“Nigeria is at risk of long-term disruption to oil and gas supplies, power generation, a collapse of industries and significant loss of revenue due to continued reduction in hydrocarbon exploration activities.

“Reduction in hydrocarbon exploration and exploitation has dire consequences for a country like Nigeria with a mono-economy hinged on crude oil,” they noted.

[Also Read] Nigeria records increase, as world rig count declines by 90

The Vice-President, Prof. Yemi Osinbajo, said on Tuesday that in order to grow Nigeria’s oil and gas reserves, the Federal Government had proposed fiscal incentives that would attract the investments in the nation’s basins in the Petroleum Industry Bill.

According to him, a key mandate of the Ministry of Petroleum Resources is to ensure the growth of the nation’s reserves base to at least 40 billion barrels of crude.

By Chibisi Ohakah, Abuja

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