Experts warn drillers of ‘new super-cycle’ in oil, gas markets amidst rapid demand growth

Solomon Ezeme

Drilling contractors in Nigeria have been urged to retool in order to optimise gains of projected super-circle in oil and gas markets amid fears of a continued rapid growth in energy demand outpacing supplies due to the Russia-Ukraine war.

This was the position of analysts at the  International Association of Drilling Contractors (IADC), 2022 yearly Health Safety and Environment, HSE, Awards, and Technical Session, held recently.

The industry experts made a case for operators in the drilling business to continuously retool their skills, acquire right equipment and recertify drilling tools in order to enhance maximum efficiency.

Chuks Enwereji, Chairman, Nigerian chapter  of the IADC in his remark emphasized the need for drilling contractors in the country to take advantage of the business opportunities which the ongoing Russia-Ukraine war presents to Nigeria and the entire international energy market.

He said skills retooling is necessary at this time to help the contractors build up on their drilling skills so that they are both equipped and prepared to take full advantage of the current oil boom in the global energy market.

He stated that 2022 would be a promising year for drillers as he called on members of the IADC in Nigeria to retool their skills in order to optimize the available opportunities, given that prices of crude oil are rising fast while supply falls.

The IADC boss who stated that its membership size has grown from 46 in 2021 to 55 in 2022, also revealed that work is expected to commence on more oil rigs in Nigeria by June, beside the current 17 active rigs.

Enwereji urged the Federal Government to ensure indigenous participation in the expected oil drilling projects, aimed at ramping up oil production in the country.

“Analysts see this as an indicator that the world may be entering a new super circle, which would be defined by a long period of strong demand and some constraints on supply, leading to high prices for energy and other commodities,” he said.

Ben Agadagba, Director Integrity & Sustainability at SpringRock Energy Limited, who spoke on the theme ‘Equipment Recertification Challenges: Building In-Country Capacity,’  emphasised on the need for drillers in Nigeria to consistently maintain their working tools through recertification, adding that this is critical in building confidence in the industry.

He said, “We must ensure that all equipment are fit for purpose and should be periodically re-certified to meet the specification of operators and enhance optimal productivity.”

Agadagba stated that operators must hire competent technicians who can professionally execute jobs according to specifications and clients’ satisfaction.
He harped on training and re-training of personnel to minimize the enormous cost associated with the technical training of drilling experts.

He also recommended the hiring of 3rd party companies for “calibration” works, saying that engaging rental companies is a strategic measure in building capacity.

“When I was in Ghana and we needed to repair a rig, the technician came from Singapore,”Agadagba noted.

Olanrewaju Ojo-Aromokudu, Senior Drilling & Completions Advisor, Chevron Nigeria Limited,  in his presentation on theme: “People Development: Reducing the Talent Gap in the Oil and Gas Industry,” noted it is difficult for companies to achieve corporate goals if it focuses more on investing in right equipment without investment in the right human capacity.

The Senior Driller with Chevron said that the oil and gas industry currently parades 20 percent of the 50 and above age bracket workforce, while the young and upcoming, ranging from age 18 to 24, constitutes 4 percent.

Ojo-Aromokudu identified an aging workforce as prevailing challenges in the industry, stating that the gap deserves to be bridged within the industry.
He further noted that the challenge can be located squarely in succession planning.

He said, “Succession plans which are embedded in knowledge transfer barely exist in the industry. But where it exists, it is not robust and sustainable.
He also urged drilling operators to explore cost-reducing digital options through online classes for the development of industry scope and capacity of workforce.