FG to revoke licenses for dormant oil blocks
By Seun Ibiyemi
With the Federal Government setting a production target of 2.06 million barrels per day for 2025, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has issued a stern warning to oil licence holders who have failed to develop their wells for decades.
He cautioned that operators who have left oil fields dormant for up to 30 years risk losing their licences, stressing that such inaction contributes nothing to the country’s economic growth.
Addressing industry stakeholders at the Cross Industry Group (CIG) Meeting in Florence, Italy—an event hosted by International Oil Companies (IOCs) operating in Nigeria—Lokpobiri urged oil firms to embrace cooperative strategies to maximise production. These, he suggested, could include joint resource utilisation for neighbouring assets, farm-out agreements, and transferring underutilised fields to operators prepared to make productive investments.
According to a press statement released by his Special Adviser on Media, Nneamaka Okafor, from Abuja on Tuesday, the Minister underscored the Federal Government’s commitment to enforcing the “drill or drop” provisions of the Petroleum Industry Act (PIA) where necessary.
“We cannot afford to have assets lying idle for 20 to 30 years without development,” Lokpobiri stated. “If an asset remains untapped for decades, it holds no real value for the licence holder or the country.
“We encourage industry players to embrace collaboration—whether through shared resources for adjoining assets, farm-outs, or handing over inactive fields to investors ready to start production.
“If companies continue to leave assets undeveloped, like any responsible government, we will reclaim them and allocate them to those prepared to put them to use.”
He further urged operators to consider farm-out agreements, particularly when assets are close to existing infrastructure, rather than incurring excessive costs on new Floating Production Storage and Offloading (FPSO) units.
The Federal Government also called on IOCs operating in Nigeria to step up investments in the country’s oil and gas sector, affirming that President Bola Ahmed Tinubu’s administration has introduced all necessary incentives to facilitate smooth and profitable operations.
Discussions at the meeting centred on industry challenges, expectations, and strategies to improve the sector’s contributions to domestic energy supply and regional expansion across Sub-Saharan Africa.
Lokpobiri acknowledged concerns raised by IOCs regarding Engineering, Procurement, and Construction (EPC) contractors, noting that EPC firms will only commit to projects when they observe firm investment decisions from industry players.
