Economy

Nigeria’s Oil Exploration Sees 6.7% Decline Due to Limited Investment

Written by Agboola Oluwafemi on October 16, 2024

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Recent reports suggest a significant 6.7 percent decline in Nigeria’s oil exploration activities on a year-on-year (YoY) basis as of September 2024, a downturn largely attributed to constrained investments in the nation’s upstream petroleum sector. This was highlighted by the Organisation of Petroleum Exporting Countries (OPEC) in its October 2024 Monthly Oil Market Report, which detailed the number of operational rigs deployed during the period.

OPEC noted that Nigeria’s rig count fell from 15 in September 2023 to 14 in the same period of 2024, marking the 6.7 percent reduction. However, on a month-on-month (MoM) comparison, the country’s exploration remained stagnant, with 14 rigs operational in both August and September 2024. In contrast, Algeria led the region with 43 rigs, while Equatorial Guinea recorded none.

Although OPEC did not specify the precise reasons behind the decline, industry analysis points to a reduction in investment flows during the period, particularly in light of the continued divestment by International Oil Companies (IOCs) from Nigeria’s petroleum sector.

Nigeria, which holds substantial proven reserves of approximately 37 billion barrels of crude oil and 209 trillion standard cubic feet (Tscf) of natural gas, has struggled to expand these reserves despite ongoing efforts over the years.

Speaking at the recently concluded African Oil Week (AOW) in Cape Town, South Africa, Engr. Gbenga Komolafe, the Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), affirmed that the country remains committed to completing its 2024 Nigerian License Round.

Komolafe underscored Nigeria’s dedication to fostering transparency, ensuring regulatory efficiency, and cultivating a favorable investment climate for both local and international stakeholders. He further outlined the strategic oil and gas blocks available for licensing, highlighting Nigeria’s vast untapped hydrocarbon potential.