Oil exploration activities in Nigeria and other African countries have dropped by 12 per cent between May and June, this year.
The drop, according to Global oil industry analysts at Baker Hughes, reflected in the rig count during the period under review.
The implication of the finding means that the continent may be producing at a faster rate than that at which it makes new oil finds.
It also means that its crude oil reserves could be depleted faster than other continents because of increased production and export, without much investment in exploration.
Global oil industry analysts at Baker Hughes, in their June report, stated that oil exploration companies operating in Africa deployed a total of 123 rigs in June against 140 utilised in May, this year.
The report, which showed a general lull in exploration stated, “The international rig count for June 2014 was 1,336, down 14 from the 1,350 counted in May 2014, and up 3 from the 1,333 counted in June 2013. It stated, “The international offshore rig count for June 2014 was 314, down 12 from the 326 counted in May 2014, and down 23 from the 337 counted in June 2013.
According to the analysts, some nations and continents made impressive outings.
For instance, the United States, which used to import about 40 per cent of Nigeria’s oil, recorded an average rig count of 1,861, up two from the 1,859 counted in May 2014, and up 100 from the 1,761 counted in June 2013.
The average Canadian rig count for June 2014 was 240, up 78 from the 162 counted in May 2014, and up 57 from the 183 counted in June 2013.
The worldwide rig count for June 2014 was 3,437, up 66 from the 3,371 counted in May 2014, and up 160 from the 3,277 counted in June 2013, the analysts said.
The Baker Hughes Rotary Rig Counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the United States, Canada and international markets.
The reasons for the low exploration in many African countries could not be confirmed. But the case of Nigeria is attributed to the delay in the passage of the nation’s Petroleum Industry Bill, PIB, into law.
The Group Coordinator, Corporate Planning and Director of Transformation of Nigeria National Petroleum Corporate, NNPC, Dr Timothy Okon, admitted last week that “the delay in the passage of the PIB has impacted negatively on the ability of the country to enhance investment in the industry.”
He said, “We are told that the PIB is now at the third reading. The act of making legislation resides in the National Assembly. It will be nice to complete work on the legislation in order to boost investment in the industry.” Okon said.
The Group Managing Director of the NNPC, Mr. Andrew Yakubu, who painted a picture of the industry in the past two years, stated that the PIB is a comprehensive legislation that should boost investment in the industry.
Despite the general impact of PIB on the industry, Yakubu said, “During the period, we improved on the exploration activities of our subsidiaries, the Frontier Exploration Service, FES, and the Integrated Data Services Limited.
Specifically, he said, “Acquisition of a total of 6,102 square kilometres of seismic data including 818 square kilometres acquired for FES operations in the Chad Basin in phases 3, 4 and 5 combined.
“Acquisition of 266 sq. km of seismic data in the phase 6 is ongoing by IDSL (a subsidiary of NNPC) in the Chad Basin even at the height of the security challenges.”
Meanwhile, the Organisation of Petroleum Exporting Countries, OPEC, has said that the global oil industry needs much investment in order to meet future demand.
OPEC stated, “World oil demand in 2015 is anticipated to increase at a faster pace of 1.21 million barrels per day, while OECD demand is expected to see positive growth for the first time since 2010, increasing around 40 tb/d, while non-OECD consumption is expected to provide the bulk of oil demand growth with 1.18 mb/d.
It stated, “Non-OPEC oil supply is expected to increase by 1.47 mb/d in 2014, following a slight upward revision from the previous report. In 2015, non- OPEC supply is projected to grow at a slower pace of 1.31 mb/d. OPEC NGLs and non-conventional liquids are forecast to grow by 200 tb/d in 2015 to average 6.0 mb/d, after growth of 150 tb/d this year.
The cartel stated that in June 2014, OPEC crude oil production, according to secondary sources, declined by 79 tb/d to average 29.70 mb/d.
The Secretary General of the Organisation, Dr. Abdalla S. El-Badri added, “Our focus needs to be on maintaining market stability. This was central to OPEC’s decision last week to maintain the Organization’s existing production levels of 30 million barrels a day. This is what is required by the market. We see a balanced and stable oil market today.