rigoffThe global oil and gas industry has recorded a significant drop in exploration last month than in August of 2012 as indicated in an authoritative rig count report.

The rig count report of Baker Hughes for August 2013 showed that operators in different parts of the world put fewer rigs on location in August 2013, than the corresponding period of 2012.

The report indicated that rig count for August 2013 was 3,416, up 54 from the 3,362 counted in July 2013, and down 113 from the 3,471 counted in August 2012, according to Baker Hughes, the company whose data on such things are considered the industry reference.

The firm stated that the Middle East rig count, in its statistics, excludes rigs in Syria for June July and August 2013.

In Africa, the rig count has been higher, at 125 in August 2013, compared with 111 rigs active during the corresponding period last year, but Africa’s drilling activity declined from 128 in July 2013 to 125 in August 2013.

International rig count for August 2013, with the exception of United States and Canada, was 1,267, down 38 from the 1,305 counted in July 2013, and up by just 6 from the 1,261 counted in August 2012.

The international offshore rig count for August 2013 was 309, down 11 from the 320 counted in July 2013, and up by 9 rigs from the 300 counted in August 2012.

The total U.S. rig count for August 2013 was 1,781, up 15 from the 1,766 counted in July 2013, and down 174 from the 1,894 counted in August 2012.

The total Canadian rig count for August 2013 was 368, up 77 from the 291 counted in August 2013, and up 52 from the 316 counted in August 2012.

Investigations showed that the rig count was equally low in Nigeria, a major oil and gas African producer and exporter.

The development is attributable to the delay in the passage of the Petroleum Industry Bill, PIB which has discouraged many International Oil Companies, IOCs from investing in more oil and gas exploration.

The major areas of conflict among interest groups, especially the Federal Government, International Oil Companies and indigenous operators have not yet been resolved.

A few days ago, the IOCs expressed fears that the passage of the PIB in its present state would reduce oil production by 25 per cent.

The Chairman of Oil Producers Trade Section, OPTS, Mr. Mark Ward stated that: “With the proposed PIB, reduced investments would not offset natural decline and Nigeria’s production would fall 25 per cent through 2022 which is more than 500 bpd.

He stated that Fiscal regimes which are the inter-play of royalties, taxes, incentives and recovery of costs and no single element can be taken in isolation when evaluating the impact on investments.

Mark who made this observation at the National Association of Energy Correspondents Association conference on PIB in Lagos remarked that: “The PIB does not balance these fiscal elements.

Generally speaking, the terms proposed increase royalties, increase taxes and lower allowances or incentives all at the same time. Additionally a 10per cent profit tax is introduced to fund the PHCF and limitations are placed on deductibility of foreign costs.

He said that all this comes on top of many other existing levies and taxes we pay, such as the NDDC levy, NCD levy and Education tax, adding that: “The cumulative effect of this is that a combination of higher royalties and taxes with reduced incentives to an extent that investors would be discouraged from investing in the deep waters.

 

Information from National Mirror was used in this report.

Share