Assessment of Cost Effectiveness of Borehole Drilling in Oyo State, Nigeria

Abstract

This study assesses the cost-effectiveness of borehole drilling in Nigeria using Oyo State as a case study. Fifteen (15) borehole drilling companies designated A to O were examined in the study area. Data collected using questionnaires covers the cost items estimated in industrial and domestic borehole drilling. Regression analysis was carried out to and the significant cost effectiveness of industrial borehole drilling in the study area. Number of skilled labour, number of unskilled labour, number of drilling rig, number of terrameter, frequency of maintenance, number of casing, drilling equipment, submersible pump, water analysis/treatment, casing type, site accessibility and skills availability among others were discovered insignificant determinants of cost effectiveness of industrial borehole drilling in the study area at 5% level, (p > 0.05). It is also noted that these factors do not have a combined significant effect on the cost effectiveness of industrial borehole drilling (F = 8.138, p = 0.114) and determine 86.0% changes in cost effectiveness of industrial borehole drilling in the study area (Adj. R2 = 86.0%), while these variables determine 94.8% changes in cost effectiveness in domestic borehole drilling (Adj. R2 = 94.8%). The result of the t – test of comparison of mean difference between the mean cost of drilling a domestic and industrial boreholes revealed a significant mean difference between costs of producing a domestic borehole (323,333.33 Naira) and industrial boreholes (530,000 Naira). This difference was found to be significant at 5% level, (t = -11.808, p = 0.000). It is concluded that borehole drilling be cost effective while quality is not compromise thereby giving due value for investment.