With its widely publicized notification of early termination of the contracts for the jackups Gerd and Groa offshore Nigeria, ExxonMobil has effectively inaugurated the widely anticipated reduction of the Nigerian rig activity.
Gerd and Groa, owned by Borr Drilling, were on locations in Asasa and Oyot fields in Oil Mining Leases (OMLs) 67 and 70 respectively, as of early April 2020.
Now other announcements of terminations of rig contracts by other companies are expected to follow, as market conditions worsen.
The two Borr rigs were under contracts originally committed until April 2021 and May 2021. The contracts for both rigs require 180-day notice for early termination.
Borr, a New York Stok Exchange listed company, says it is in discussions with ExxonMobil with regards to planning the discontinuity of operations.
Nigerian rig activity was at a three year high in January 2020, with 32 rigs in various stages of operations on as many locations.
But the combination of COVID-19 and a price war has, since then, has gutted the hydrocarbon industry worldwide, with cargoes of crude oil sloshing around looking for buyers.