Going by the increase in rig counts in May, the International Association of Drilling Contractors (IADC) in Nigeria have revealed the oil market demand may be showing signs of full recovery in no time.
Chairman of IADC, Nigeria chapter, Chuks Enwereji, of Shelf Drilling Offshore Services, disclosed at the 2021 HSE Awards & Technical Session Webinar that the Nigerian chapter’s 10 rigs in February increased to 12 in May, signaling market recovery, but added that the reported fresh wave of the pandemic might deflate optimal drilling expectations.
He noted that a revival of the Iranian nuclear deal will lead to an increase in global supply, while the oil market is anticipating that Iran’s supply will pick up again by late summer.
“This notwithstanding, it is expected that the demand recovery will be strong enough to absorb it,” Chuks Enwereji said.
The association, however, lamented the gaps in training and Research and Development (R&D), saying that decisions to cut costs could end in catastrophe if attention is not paid to training and other key parameters.
SEPLAT Executive Director, Effiong Okon decried the near absence of research centres in Africa, low rig counts, bottleneck in local content compliance and variable cost of doing business.
He stated that despite low productivity and fragmented market including capital inadequacies, opportunities abound in Nigeria’s oil and gas space, adding that with new rigs, there are lots of businesses ahead.
Okon solicited considerable efforts to improve planning, data analysis, hardware barriers and oil well control failures to shape the future.
“Hardware is needed for drilling, but with ICT, you can predict situational variables accurately,” he advised. He urged members to develop strong and reliable corporate governance and desist from cutting corners during integrity tests saying, “At SEPLAT, we raised a $600 million bond and the bond was oversubscribed because of our strong corporate governance.”
Okon urged drilling contractors to carry out scheduled maintenance according to manufacturers’ recommendations and adhere to control mechanisms.