Oil: Nigeria, rest of other W/African record declining rig count

16 December 2014, Lagos – The falling oil price has taken its toll on the rig count in Nigeria and its West African oil producing neighbours as the region recorded an eight percent decline in rig utilisation in the month of November.

According to Rig Data, a worldwide offshore rig fleet information report obtained by Vanguard, current competitive offshore rig utilisation of the region stands at 68.8 percent, as against 77.2 percent recorded the previous month.   The decline is remarkable given the fact that the region recorded a rig utilisation of 89.1 percent about this time last year.

oil-rigOther parts of Africa recorded rig utilisation of 57.1 percent, as against 83.3 percent recorded a month ago. A breakdown of the rig utilisation of other regions of the world shows that Far East Asia recorded 66.7 percent as against 70.3 percent, South Asia recorded 82.9 percent as against 85.7 percent recorded last month, while South East Asia recorded 72.3 percent as against 72.8 percent a month ago.

The current rig utilisation in East Europe is 50 percent, as against 100 percent utilisation recorded last month, while North Sea Europe has a current rig utilisation of 94.9 percent as against 92.9 percent recorded last month.

Canadian Atlantic part of North America maintained its 100 percent utilisation recorded last month, while the Pacific North America also maintained its zero percent utilisation.

For the Alaska region of the United States of America, rig utilisation increased from 50 percent recorded last month to the current 100 percent use, while other parts of the U.S.A have 72.7 percent utilisation as against 71.9 percent recorded a month ago.

Brent crude had hit a five-year low below $68 a barrel after averaging around $110 in 2011 to 2013. Oil markets have been volatile since last November’s decision by the Organization of the Petroleum Exporting Countries not to cut production. In recent days, traders have sought a price floor for crude, which has tumbled some 40 percent from June highs.

The chief economist of the International Energy Agency (IEA), Fatih Birol last week said he forsaw oil rising to near $100 a barrel in coming years, some 40 percent above current prices that have been hit by a supply glut and sluggish global growth.

“I think an oil price, which will balance the markets in the next years to come, will be close to $100,” Fatih Birol told a conference in Stockholm, when asked to quantify at what level he sees oil prices long-term.

“We shouldn’t be blinded with what’s happening now. Looking at the geology, looking at the economics of the oil markets, one shouldn’t be surprised if we see in a few years’ time, again, a rebound of prices,” Birol said

– See more at: http://www.vanguardngr.com/2014/12/oil-nigeria-wafrican-countries-record-declining-rig-count/#sthash.bQy0Gcan.dpuf

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