In less than a decade, there have been two global meltdowns of crude oil price and the latest was caused by the spread of coronavirus disease (COVID-19) in 2020. This is expected to have a negative impact on the global economy, especially on those countries that depend more on the revenue from sales of crude oil. One of the measures that can be taken to survive this kind of situation in the future is to reduce the unit technical cost for producing a barrel of oil by using locally available materials. This research investigated a local clay sourced from Ropp in Plateau State, Nigeria, by considering its rheological characteristics and economic implications of using it for partial to total substitution of imported bentonite clay for oil and gas drilling operations. The local clay was termed as Ropp bentonite clay (RBC). Various spud mud samples were prepared by dispersing a mixture of imported bentonite clay (IBC) and RBC (0–100%) in 350 ml of water. Certain quantity (0–1 g) of polyacrylamide cellulose was added to the mud samples before rheological and physical properties were determined using the standard API procedure. An economic model was built to determine the cost implications of using any of the mud formulations at different consumption rates. The results show that IBC–RBC blend in the right proportion could save Nigeria 12 to 36% of the cost of bentonite clay used to drill wells in the country.

Nigeria uses the concessionary petroleum fiscal system for onshore investment in the country where the ownership of the hydrocarbon resources belongs to the contractor's. The government then gets her revenue through payment of royalties and taxes. A fixed royalty rate of 20% is specified for onshore petroleum investment in the country. This kind of royalty payment system is regressive in nature and affects the sustainability of E&P firms during period of low oil price. This research considered the incorporation of a delayed royalty framework into the concessionary petroleum fiscal system in Nigeria. Two economic models were built to evaluate upstream petroleum investment in Nigeria onshore environment using the spreadsheet modeling technique. The delayed royalty framework was incorporated into one of the model. The delay in royalty payment was made as a function of the time it takes the contractor to recoup his capital before payment of royalty and taxes. Oil price was varied in the model between $30-$90/bbl to see the impact of the delay in royalty payment on the sustainability of the investment under the delayed royalty framework. It was observed that the delayed royalty framework made the contractor to recoup his capital early during the life of the investment. It also increased the contractor's revenue which will help to increase the sustainability of the investment during period of low oil price.

The 1993 production sharing contract (PSC) in Nigeria specifies different royalty rates for oil and gas investment. The royalty rates were fixed. This makes the fiscal arrangement to be regressive in nature. Royalty rate of 20% is to be paid for onshore investment using the 1993 PSC. Hence, there is a need to make the fiscal arrangement progressive. The delayed royalty framework was incorporated into the1993 PSC as a progressive measure to make it dynamic. Two economic models were developed using spreadsheet technique to evaluate the impact of the delayed royalty framework on onshore petroleum investment. The 1993 PSC fiscal framework was used to develop the economic models. The delayed royalty framework was incorporated into one of the models. The delay in royalty payment hinged on the payout period of the investment. It was observed that the delayed royalty framework increased the contractor’s revenue during the period of low oil price. Thus, increasing the sustainability of the investment during period of low oil price.

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