THE Federal Government has threatened to withdraw the licences of oil blocks, which the

owners have failed to develop and have been dormant for decades.

The Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, gave the warning at a Cross Industry Group meeting held in Florence, Italy, organised by International Oil Companies (IOCs) operating in Nigeria.

According to a statement by his media aide, Nneamaka Okafor, on Tuesday, April 1, the meeting was focused on challenges, expectations, and strategies to enhance the sector’s contributions to domestic energy needs and regional expansion across sub-Saharan Africa.

“We cannot continue to have assets sitting idle for 20 to 30 years without development. If you are not utilising an asset and it remains underdeveloped for decades, it neither adds value to your books nor to us as a country.

“We encourage industry players to explore collaborative measures such as shared resources for contiguous assets, farm-outs, and the release of underutilised 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,” Lokpobiri stated.

He urged operators to consider farm-out agreements where assets are close to existing infrastructure rather than incurring high costs on new floating production storage and offloading units.

He also tasked them to consider farm-out agreements where assets are close to existing infrastructure, rather than incurring high costs on new floating production storage and offloading units, calling on them to ramp up investment in the oil and gas industry.

While IOCs have pointed to engineering, procurement, and construction (EPCs) contractors as a challenge, Lokpobiri explained that the EPCs would only commit to terms when they see strong investment decisions from industry players.

“The government has done its part by providing the requisite and investment-friendly fiscal policies, including the president’s executive order incentivising 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,” the minister stressed.

He reiterated the need for IOCs to support local refining efforts, noting that more refineries are coming upstream and would require a steady supply of crude oil.

He added that the country needed to be able to ramp up production to meet both local and international obligations.

Lokpobiri’s warning came on the backdrop of the federal government urging the IOCs to ramp up investment in the country’s oil and gas sector.

With 2.06 million barrels per day (bpd) of crude oil production target this year, Lokpobiri believes that the government will begin implementing the “drill or drop” provisions of the Petroleum Industry Act (PIA) in line with the drive to boost oil production.

The ICIR reported that Nigeria’s average daily crude oil production declined to 1.465 million bpd in February, falling below the 1.5 million bpd quota the Organisation of Petroleum Exporting Countries (OPEC) assigned to the country.

Data from OPEC and the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) indicated this in February.

It reported also in January that crude oil production had not improved in the last four years despite the NUPRC doubling the country’s oil rig count from 16 in 2021 to 32 in 2024.

At the time, the NUPRC chief executive, Gbenga Komolafe, claimed the increase in the oil rig count was an effort to boost upstream activities and enhance the country’s crude oil production capacity.

Experts are concerned that despite the rich mineral resources, Nigeria has been failing to meet its crude oil production benchmark, hampering the country’s oil and gas sector, stifling expected revenues and hindering local refineries from getting adequate feedstock.

While presenting the 2025 budget to the National Assembly on December 18, 2024, the president highlighted that the government was targeting N34.8 trillion in revenue to fund the budget, of which the bulk of the revenue will come from crude oil proceeds.

He projected that oil revenue would bring in N19.6 trillion while non-oil sources would come in N15.22 trillion.

Meanwhile, a report by Bloomberg on Tuesday shows that Nigeria made the biggest oil production cut among OPEC’s members in March, reducing output by 50,000 bpd to an average of 1.5 million per day, in line with its quota noting that loadings of the country’s Bonny Light crude grade face delays following a fire at the Trans-Niger Pipeline.