The Dramatic Impact of the Last Two Years on Drilling in Nigeria

The developments in the last two years, concerning the fall and the gradual return of the price of Oil jolted the entire community of Oil and Gas Players. One of the major subsectors that was hardest hit is the Drilling sector.

 

Ote Enaibe is the President of the Nigerian Chapter of the International Association of Drilling Contractors (IADC). The impact on the members of the body was dramatic.   “In 2014, drilling activities, when the price was about $108 per barrel, was at 50 Rigs drilling. These involved Rigs on Land, Swamp, Shallow and Deep Waters. The total number of Rigs then was about 48-50. A year later, the price dropped to about $50 per barrel and people thought the situation was still manageable.”

 But when the Price dropped to about $36, activities also dropped with it. Rigs dropped from 50 to 20. The most hit was the Swamp, the Jack up and finally the Deep Offshore. But as the price began to rise to $57, which is about a 67% increase. “It provided a lag time for the industry to evaluate the development and so, we saw Rigs drop further to 10 Rigs. These drops were experienced in the last quarter of 2016 to early 2017.”

But from the 2^nd quarter 2017, when the price started ramping up to 75$ drilling activities began to pick up and the result was a climb to about 30 Rigs from the 10 where the ebb took operations. “We are hopeful that the number will rise to 35 before the end of the year.”

 On the downside, Ote lamented that the drop in Rigs has far reaching consequences on the Players and on the economy at large. “ You must understand that when you drop your rigs from 50 down to 10, it means those involved are out of work, which also means the equipment you are using for drilling have actually stopped working.”

This downturn, according to the IADC Nigeria President, would begin to compromise the integrity of your safety standards. “This is why IADC want to ensure that we return to optimal operational efficiency as we go back to work.”

 The international association of Drilling Contractors was formed in 1940 to carry out drilling activities especially in the Upstream Sector of the Oil and Gas industry. It was created to form a platform to regulate standards, generate and share information on operational efficiency.

Ote Enaibe is the President of the Nigerian Chapter. In 2012, Drilling Contractors in Nigeria came together to create the Nigerian Chapter with the support of the International body. The members have been able to uphold the principles and tenets of the global association. The membership of the Nigerian chapter also includes service providers in the industry specifically in the Upstream and those who have fields they want to drill.

Ote says the reporting system is based on the IADC format. “They are the standards set by the international body to ensure that work is done safely, the people are well trained, the operational efficiency is high; by so doing you would have saved cost.”

Membership for the organization comprise of big names whose drilling operations span across the globe. “Anybody that drills a well in Nigeria is a member of the association.”