Westwood anticipates a substantial surge in drilling activities within Nigeria’s oil and gas sector between 2023 and 2030, with a forecast of an average of 140 development wells to be drilled each year during this period. This significant uptick in drilling operations is expected to be driven by both onshore and offshore activities, ultimately reshaping the nation’s hydrocarbon landscape.
On the onshore front, Westwood anticipates that increased infill drilling will play a pivotal role in maintaining current production levels in Nigeria’s aging oil fields. Additionally, development drilling from marginal fields, resulting from recent leasing rounds, will further fuel this growth. Offshore deepwater drilling is also poised to see an upturn, particularly from 2026 onwards, as preparations intensify for the development of significant projects such as Shell’s Bonga Southwest-Aparo field, Chevron’s Nsiko, TotalEnergies’ Preowei Phase II development, and ExxonMobil’s Uge oil fields, all of which are set to commence production post-2030.
A prime example of ongoing deepwater infill drilling, Westwood said, is the recent commencement of up to eleven infill wells in TotalEnergies’ Egina and Akpo fields, which began in the third quarter of 2023. Despite this positive momentum, shallow waters, as reported by Westwood’s RigLogix, have seen stagnant activity, with an average of 3.5 active jackup rigs since 2021. This figure represents a significant drop from nine active jackup rigs in 2019 and 7.5 in 2020. While Westwood anticipates a modest increase in shallow water drilling activity over the forecast period, it is not expected to return to pre-2021 levels.
Importantly, Nigeria is an OPEC member and has recently committed to a production quota of 1.38 million barrels per day (mmbpd) in 2024. However, Nigeria has consistently produced below its quota since May 2020, averaging just 1.3 mmbpd. Achieving the 2024 production quota of 1.38 mmbpd is considered ambitious and highly unlikely, regardless of Nigeria’s production target, Westwood said. Prolonged production quotas at current levels beyond 2024 could have a lasting impact on forecast production growth.
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But despite these challenges, Nigeria is clearly positioning itself to capitalise on the energy deficit in European nations and the rising hydrocarbon demand from industrialising nations such as China and India by the end of the forecast period. The country must address its infrastructure and security issues while fostering an attractive business environment to entice local players and encourage continued investment from international energy companies, particularly in offshore assets.
Westwood’s analysis indicates that the coming years present a golden opportunity for domestic oil companies to take a leading role in onshore and shallow water exploration, with drilling and production anticipated to grow until at least 2030.
