NIGERIAN OFFSHORE RIG SPENDING TOTALLED $8.8BN IN 8YRS
International Oil Companies operating in Nigeria are said to have spent a sum of $8.846bn on offshore rig drilling contracts in the last eight years, Riglogix, a comprehensive offshore rig data provider, has said.
A total sum of $487m was spent in 2001, $557m in 2002, $563m in 2003, $478m in 2004, and $600m in 2005.
Offshore rig spending took a leap in 2006 with a total sum of $1.248bn expended, $1.541bn in 2007, $1.735bn in 2008 and $1.637bn in 2009.
Over $1.2bn offshore rig spending, according to Riglogix, had been booked for 2010, a 25 per cent decline from 2009 levels if no additional contracts are signed this year.
The global economic meltdown which was said to have affected the Nigerian rig market adversely in 2009 is largely responsible for the decline in spending projections in 2010.
Riglogix said, 'Nigerian offshore rig spending totaled nearly $1.7bn in 2009 and more than $6bn over the past four years. With offshore rig dayrates rising in most global offshore rig markets from 2004-2008, spending in Nigeria has been on the rise. Like many other markets around the globe, the Nigerian rig market was adversely impacted by the global downturn in 2009. However, over $1.2bn in offshore rig spending is already booked for 2010, reflecting a 25 per cent decline from 2009 levels if no additional contracts are signed this year.'
'With the cost of offshore drilling rigs understood to constitute about half the cost of a typical Nigerian drilling programme, the figures above help provide perspective on the opportunity Nigeria offers both oil service companies and drillers alike. If the 2x rig cost rule of thumb holds, Nigerian drilling programmes alone present a 2010 revenue opportunity of over $2.5bn for oil service and drilling companies.'
With one of the largest proven oil reserves, Nigeria, according to Riglogix, has a robust local market for contract drilling and oil services patronised by Royal Dutch Shell, ExxonMobil, Chevron, ConocoPhillips , Total, Eni/Agip, and Addax Petroleum. These are oil companies with key exploration and development projects in the country.
Drilling contractors with a presence in Nigeria included Transocean, Noble, Seadrill, Stena, Seawolf, and Frontier Drilling.
Currently, 10 jackups, three deepwater semi submersibles, and three drillships are in Nigeria, and all but one jackup are contracted.
Pride and ENSCO, United States contractors, have worked jackups in Nigeria in the past, but neither of them has had a rig deployed there in several years. This, apparently, shows how robust local drilling operations are.
Noble and Transocean have established themselves in Nigeria through the creation of local subsidiaries. Noble has even put the ownership of one of their rigs against a local subsidiary.
Seadrill has an agreement in place with Petrolog, a Nigerian company. Petrolog is Seadrill's official representative in Nigeria, and all Nigerian contracts are assigned to Petrolog. In exchange for this service, Petrolog takes a percentage of the dayrate generated by Seadrill's Nigerian rig contracts.
Seawolf, an indigenous offshore drilling contractor in Nigeria, has recently taken jack-up drilling rigs.