Nigerian Government to Revoke Dormant Oil Blocks

Nigerian Government to Revoke Dormant Oil Blocks

The Federal Government has issued a stern warning to oil block owners, stating that their licences will be revoked if they fail to develop their assets. This move is part of the government's push to achieve its 2025 oil production target of 2.06 million barrels per day.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, made the declaration on Tuesday, stressing that the government will enforce the "drill or drop" provisions of the Petroleum Industry Act (PIA) to enhance production. Currently, Nigeria's oil production stands at 1.67 million barrels per day, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

Speaking at a Cross Industry Group meeting in Florence, Italy, organized by International Oil Companies (IOCs) operating in Nigeria, Lokpobiri criticized the underutilization of oil blocks. He pointed out that some assets have remained dormant for decades, providing no benefit to their owners or the country.

"We cannot continue to have assets sitting idle for 20 to 30 years. If you're not developing them, we will reallocate them to those willing to invest," Lokpobiri warned. He encouraged operators to explore farm-out agreements and shared resources for neighboring assets to maximize production and cut costs.