ExxonMobil has publicized notification of early termination of the contracts for the jackups Gerd and Groa offshore Nigeria, which are working under contracts originally committed until April 2021 and May 2021, respectively
The dwindling oil fortunes have led to over 75 job losses in Nigeria’s oil rig space in the last three months, New Telegraph gathered at the weekend.
The jobs loss, which, according to an industry source, was bouyed by a crash in rig counts from a three-year high of 32 to 21 between January and March, is threatening the 40 billion-barrel oil reserves target set by the Federal Government.
Confirming the crash in rig counts at Nigeria’s upstream industry, Organisation of Petroleum Exporting Countries (OPEC) stated that active oil exploration, which was affected by this trend, brought about a billion investments into the country’s economy as well as development of related sectors and infrastructure.
“Nigerian rig activity in various stages of operations on as many locations fell from a three year high in January 2020, with 32 rigs to 21 rigs in March,” a data from OPEC read.
The rigs, the data added, also supplied new jobs for Nigerian citizens and improvement of social and living standards in general while absence of oil exploration implies the reverse of increased economic growth.
“The logic is straightforward. When the number of oil rigs rises, it means more people can be employed, when it drops, it means loss of employment opportunities,” Managing Director, Alliance Capital Management Limited, Edward Diete Koki, said.
Actions in the industry, further checks showed, have been reduced to just maintenance activities by oil and gas companies even though the government has over the years been singing that it wants to increase its crude oil reserves to 40 billion and increase daily production to four million barrels per day production.
Some of the biggest oil companies operating in Nigerian rig activities have started cancelling their oil rig contracts from drilling companies as the effect of Coronavirus and a price war continue to take a toll on hydrocarbon industry worldwide.
The termination of rig count contracts in Nigeria’s oil and gas industry exposed the volatile state of the industry, which is the main revenue earner of the country, an indication that Africa’s biggest oil-producing country is no longer an investment destination despite its huge potential.
ExxonMobil has publicised notification of early termination of the contracts for the jackups Gerd and Groa offshore Nigeria which are working in Nigeria under contracts originally committed until April 2021 and May 2021, respectively.
The contracts for both rigs require 180-day notice for early termination.
“The company is in discussions with Exxon Mobil with regard to planning the discontinuity of operations for both rigs following the early termination notices,” Borr Drilling said in a statement.
According to an intelligence publication from offshore technology, other announcements of terminations of rig contracts by other companies are expected to follow, as market conditions worsen.
“Some of our customers are unable to continue safe operations in the current circumstances are experiencing difficulties in their respective supply chains and have announced cost-saving initiatives,” Borr Drilling said.
“Further, a number of customers have contractual rights in place to suspend operations in certain circumstances, and we could be subject to further suspension notices in light of market conditions,” the company added.
Source: New Telegraph