The Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, has issued a warning of potential license revocations for owners of oil blocks who have failed to develop them.
This declaration is set against the backdrop of the Federal Government’s appeal to international oil companies operating within Nigeria to escalate their investments in the country’s oil and gas sector, emphasizing that the current administration has furnished all requisite incentives to ensure efficient and profitable operations.
With the Federal Government establishing a production target of 2.06 million barrels per day for 2025, Lokpobiri indicated that the government will commence the implementation of the “drill or drop” provisions outlined in the Petroleum Industry Act, in alignment with the drive to augment oil production.
As of February 2025, oil production was reported at 1.67 million barrels per day by the Nigerian Upstream Petroleum Regulatory Commission.
A statement released by the minister’s media aide, Nneamaka Okafor, on Tuesday, disclosed that Senator Lokpobiri issued the license revocation warning during a Cross Industry Group meeting held in Florence, Italy, organized by International Oil Companies operating in Nigeria.
The meeting centered on challenges, expectations, and strategies to enhance the sector’s contributions to domestic energy requirements and regional expansion throughout Sub-Saharan Africa.
According to the minister, “We cannot permit assets to remain idle for periods of 20 to 30 years without development. If an asset is not being utilized and remains undeveloped for decades, it provides no value to your financial records nor to us as a nation.
“We encourage industry stakeholders to explore collaborative approaches such as shared resources for adjacent assets, farm-out agreements, and the release of underutilized assets to operators prepared to invest in production. Otherwise, as a responsible government, we will reclaim these assets and allocate them to those willing to proceed with development.”
The minister also urged operators to consider farm-out agreements where assets are located near existing infrastructure, rather than incurring substantial costs on new floating production storage and offloading units.
The minister implored operators to intensify investment in the oil and gas industry.
He clarified that while International Oil Companies have cited engineering, procurement, and construction contractors as a challenge, EPCs will only commit when they observe strong investment decisions from industry participants.
He stated, “The government has fulfilled its obligations by providing the necessary and investment-friendly fiscal policies, including the president’s executive order incentivizing deepwater investments. Now, the onus is on the International Oil Companies and other operators to make strategic investment decisions that will stimulate increased production and sustainability within the sector.”
He underscored the necessity for International Oil Companies to support local refining initiatives, noting that an increased number of refineries are coming online and will require a consistent supply of crude oil. To facilitate this, he emphasized that ramping up production will enable Nigeria to meet both domestic and international demands.
Speaking at the meeting, the Chairman of the Oil Producers Trade Section, OPTS, Mr. Osagie Osunbor, commended the Minister for his direct engagement with industry stakeholders and for the Federal Government’s ongoing efforts in advancing the sector.
“We appreciate the government’s dedication to establishing a conducive environment for investment. The minister’s engagement has provided valuable insights and has also challenged us as industry stakeholders to intensify efforts to increase production,” he stated.
Meanwhile, a report from Bloomberg has indicated that Nigeria implemented the most substantial oil production cut among members of the Organisation of the Petroleum Exporting Countries in March, reducing output by 50,000 barrels per day.
It stated that the country reduced output to maintain an average of 1.5 million barrels per day, aligning with its OPEC quota, as the cartel urged tightened quotas among its members. According to a Bloomberg survey, OPEC reduced overall production by 110,000 barrels per day in March.
It added that Iraq followed with the second-largest reduction after Nigeria, cutting output by 40,000 barrels per day to 4.15 million barrels. Despite this, Iraq remained above its agreed limit of 4 million barrels per day.
However, the United Arab Emirates increased production by 30,000 barrels per day, further exceeding its quota. Meanwhile, OPEC+—led by Saudi Arabia and Russia—has expressed readiness to gradually restore production and increase supplies to stabilize global oil prices.
The group is expected to add approximately 138,000 barrels per day this month as part of a phased increase extending through late 2026.
The report noted that the reduction in Nigeria’s production follows delays in loading Bonny Light crude due to the recent explosion at the Trans-Niger Pipeline.
The pipeline, which is a crucial infrastructure for Nigeria’s crude exports, has frequently experienced operational disruptions, impacting the country’s capacity to meet production targets.
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