The Nigerian government has announced plans to take back oil assets that have been abandoned for many years.
This is part of an effort to increase oil production in the country.
Senator Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), made this known at a meeting in Florence, Italy, where he spoke with industry leaders about the challenges and opportunities in Nigeria’s oil sector.
He explained that the government will enforce the “drill or drop” rule in the Petroleum Industry Act (PIA), which allows it to reclaim oil fields that companies have left unused for too long.
“We cannot continue to have assets sitting idle for 20 to 30 years without development. If you are not utilizing an asset, it neither adds value to your books nor to us as a country. We will take back these assets and allocate them to those willing to invest,” he said.
Lokpobiri encouraged oil companies to work together by sharing infrastructure or signing farm-out agreements, which allow smaller companies to develop underused oil fields instead of leaving them idle.
He also advised against spending huge amounts on new oil storage and production facilities when existing ones could be better managed.
“We encourage industry players to explore collaborative measures such as shared resources for contiguous assets, farm-outs, and the release of underutilized assets to operators ready to invest in production. Otherwise, like any responsible government, we will take back these assets and allocate them to those willing to go to work,” he added.
The minister, Senator Heineken Lokpobiri also called on international oil companies (IOCs) in Nigeria to increase their investments in the country’s oil and gas industry.
He noted that the government has introduced new financial incentives to attract more capital for oil exploration and production.
He emphasized that President Bola Tinubu’s administration has created a business-friendly environment, including executive orders to support deep-water oil exploration.
However, he urged oil companies to take action and commit to bigger projects, especially in engineering, procurement, and construction (EPC).
“The government has done its part by providing the requisite and investment-friendly fiscal policies, including the President’s Executive Order incentivizing deep water investments. Now, the ball is in the court of the IOCs and other operators to make strategic investment decisions that will drive increased production and sustainability in the sector,” Lokpobiri said.
Osagie Osunbor, Chairman of the Oil Producers Trade Section (OPTS), welcomed the government’s engagement with industry leaders and agreed that more investment is needed.
“The minister’s engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production,” he said.
Nigeria is Africa’s largest oil producer, but it has struggled with low production due to old infrastructure, oil theft, and a lack of investment.
The government hopes that by enforcing its policies and offering incentives, it can revive the oil industry, ensure a stable energy supply, and increase exports.
