Oil rigs are a compulsory instrument in the discovery, mining and refinement of oil deposits both on land and at sea. Oil rigs could be seen from the shore of your local beach for those who live in the coastal cities, particularly a city that contains oil refineries. Oil rigs are interesting for their intricate processes, regulations and sheer numbers globally.
Around the OPEC nations there exist several types of oil rig, some of which include:
- Semisubmersible oil rigs are the preferred type of rig for deep-sea oil exploration due to the stability of the structure, which, when flooded with water, remains nearly motionless at the surface of an ocean.
- A typical oil platform is built from concrete and steel, and can not only drill for oil, but also can process and refine the oil.
- Jack-up rigs extend long legs to the bottom of the sea floor to provide stability to the structure. The Jack-up is limited by the depth of water in which it can operate.
- Also the — drill ships, hotels and mobile storage units — are meant as temporary oil extraction structures when a larger oil rig cannot be used.
Rig count is largely a reflection of the level of exploration, development and production activities occurring in the oil and gas sector. Nigeria has the second largest amount of proven crude oil reserves in Africa.
However, Nigeria saw the fourth largest drop in rig count among its peers in OPEC in 2016 as the number of rigs averaged 25, down from 34 in 2014.
From a record low as 23 in December 2016, the number of the Nigeria’s active oil rigs rose to 35 in February 2017, a level last seen in early 2015. The upturn in the rig count was mostly triggered by the recent rally in global crude oil prices.
The country recorded an increase in the number of rigs among its peers in the Organization of Petroleum Exporting Countries in February 2017, as four rigs were added to the 31 active in January 2017.
The slump in oil prices, which started in mid-June 2014, forced many companies operating in the Nigerian oil industry to slash their capital budgets and suspend some projects, resulting in a drop in the number of rigs.
One of the nation’s major independent oil companies, Seplat Petroleum Development Company Plc, said its rig-based activity at three oil blocks in 2017 was limited with just one rig deployed for a work-over well in the Orogho field.
The company, in its full-year 2017 financial results, said, “It is now selectively considering production drilling opportunities in the existing portfolio with a view to reinstating a work programme designed to capture the highest cash return production opportunities while diligently preserving a liquidity buffer.”