Nigeria’s Oil Sector Gets $8bn Lift, Rig Count Hits 46

Crude oil producers in Nigeria have invested $8 billion in rig infrastructure to boost the country’s hydrocarbon output, raising the total number of active rigs to 46, according to the Nigerian Upstream Petroleum Regulatory Commission.

The amount invested within three years, between 2022 and 2025, has resulted in a significant boost to drilling activity and production capacity. This investment has financed the drilling of 236 wellbores to total depth since 2022 and has increased the nation’s rig count to a new high of 46 as of July 2025.

The Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, disclosed the latest figures during a media workshop on Wednesday in Abuja.

He said the country’s rig count has seen a sharp rise, increasing from just eight in 2021 to 31 in January 2025, and further climbing to 46 by July 2025, representing a 475 per cent increase over a four-year period, and a 48 per cent rise within the first seven months of 2025 alone.

In the oil and gas industry, a rig is the equipment used to drill wells into the earth’s subsurface to extract crude oil or natural gas. The rig count is an important indicator of how active and healthy the oil and gas industry is. It shows how much drilling is going on, how confident investors are, and what future oil production might look like.

A high rig count means more exploration and drilling, while a low count suggests reduced activity or investment. According to him, the growth in rig counts showed that the country is making huge progress in harnessing its hydrocarbon resources.

This, he said, is in line with the Commission’s effort to boost oil production and achieve its ambitious plan to increase Nigeria’s crude oil production by one million barrels per day from October 2024 to October 2026.

He attributed the steady growth in rig count to the enactment of the Petroleum Industry Act in 2021 and the commission’s unwavering commitment to increasing oil production in the country.

Recall that in 2023, President Bola Tinubu mandated the commission to drive growth in the upstream petroleum sector. In 2024, the President signed important Presidential Executive Orders to further open the oil industry and declared, “Nigeria is open for business.”

Komolafe said, “The commission commenced operations just less than four years ago. We took off at a time when the production declined to about one million barrels, but now, we are oscillating around 1.7 million barrels.

“Rig count was also at an abysmal level. And of course you know that rig count is a very key metric for measuring vibrancy and performance in the industry, because it is a key equipment on which you drill the oil and reveals the level of vibrancy, activities in the industry.

“And today, I can say proudly that the last time I checked, because I have my dashboard to evaluate where we are, on a daily basis. The rig count today is 46, and we are not stopping here. The signs are positive. The feedback in the industry has been very encouraging.”

Giving further details on the rig availability, the Senior Manager, Wells & drilling service at NUPRC, Sunday Ala, said the multiplicity of rigs has opened up the employment space for more jobs, ensuring a boost in economic activities.

According to a chart presented, the rig count slumped to as low as 6 in May 2020 during the COVID-19 pandemic and before the enactment of the PIA. However, following the passage of the legislation, the figures steadily climbed, reaching 24 by January 2023.

The commission recorded a brief dip in March 2023 to 20, but by September of the same year, the average rig count had surged to 31. This growth trend continued into 2024 and early 2025, with a sharp rise observed between June and August 2024, increasing from 29 to 38 rigs.

By January 2025, the industry recorded an average of 39 rigs, marking a 145 per cent increase from January 2020 and demonstrating a resurgence in exploration and drilling activities.

The presentation read, “Rig activity has grown steadily post-PIA, driven by investor confidence and tighter regulatory oversight. 2023 and 2025 marked key inflection points, probably tied to the ramp-up of Petroleum Prospecting License awardees with licenses expiring in June 2025. Over $8bn has been expended by the rigs to drill and initially complete approximately 236 wellbores to Total Depth since 2022. The rigs are playing key roles in executing the 120 approved Field Development Plans between 2022 and to date to unlock a projected 4.7billion barrels of oil and 29.26 Trillion Cubic Feet of gas in place.

“Rig activity has risen by 28 per cent by Half-year 2025, reflecting strong regulatory support and increased operator confidence. The steady month-on-month rise signals intensified upstream activity across terrains. This growth trajectory highlights the commission’s strategic role in aligning operations with the Project 1MMBPD Incremental initiative

“It may also reflect a strategic push by “marginal” operators to meet the June 2025 regulatory timeline. Overall, it underscores a robust response to the commission’s business enablement posture and optimised rig utilisation.”

The senior official said that Nigeria’s rig count has played a critical role in ramping up production, with daily volumes exceeding 1.7 million barrels per day as of Tuesday.

When asked about the impact of the rig count on crude production, the official explained that while not all drilling results in immediate output, development drilling, which follows exploration and appraisal stages, is the primary contributor to what enters the national production tally.

“Every drilling activity must be approved based on its potential to unlock value, both in terms of reserves and future production. But it’s only when a well progresses to the development phase and is connected via a piping system to a production facility that it begins to count toward national crude output,” he said.

He clarified that two key types of drilling, exploratory and appraisal, often precede full-scale development. Exploratory drilling is aimed at making new discoveries, while appraisal drilling is used to confirm the commercial viability of an existing find.

“We have some work going on in Kolmani, and we currently have two rigs involved in appraisal drilling. If the data meets the minimum requirements, that work will be reclassified as development drilling, allowing us to add production from that axis,” the official stated.

Another appraisal well is currently being drilled in Nasarawa State, but the Commission said capital commitment in the northern frontier is still modest as the region remains largely in the exploration phase.

The official disclosed that Nigeria now has rigs deployed across all major terrains, land, swamp, and offshore, with three currently operating in deepwater locations.

“This expansion in rig presence has contributed significantly to the steady output levels we’re seeing. Since the spike in rig count began, we haven’t dropped below 1.6 million barrels per day. As of yesterday, production was well above 1.7 million,” he added.

Meanwhile, the commission’s chief executive has revealed plans to reduce the unit cost of crude oil production in line with the country’s aspiration.

He said, “And what are the signposts? What are the key elements that we are targeting? It is the aspiration of the country that the unit cost of production should be driven down, should go down south, and should be reduced.”

He also said the NUPRC, through the Project One Million Barrels initiative, which was launched in October 2024, has scaled up Nigeria’s oil production from one million barrels per day, oscillating around 1.7 million barrels.

Komolafe revealed that about 300,000 barrels of oil per day have been achieved since the launch of the programme. “On growing crude oil production, 300,000 barrels have been added daily since the launch of the project, one million barrels per day, a project launch in 2024.”