The Federal Government has warned oil companies holding licences without the capacity to invest or produce crude that their approvals risk being revoked, as Nigeria’s daily production rises to 1.8 million barrels.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, issued the warning on Wednesday in Abuja at the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Energy and Labour Summit (PEALS).
He said Nigeria could no longer afford idle wells at a time when the Tinubu administration is aggressively pushing to ramp up crude output.
“Some time ago, we gave operating licences to 12 firms. If each produced 10,000 barrels daily, that would have added 120,000 barrels to our output. But today, fewer than half of them have made the investments needed to produce,” the minister said.
Citing provisions of the Petroleum Industry Act (PIA), he stressed that operators must “drill or drop out.” He questioned the rationale for extending licences of companies that had failed to demonstrate capacity, accusing some of “travelling around the world in fine suits” instead of investing in oilfields.
Lokpobiri added that government reforms over the last two years had created a favourable investment climate, making it untenable to leave resources dormant. “The inflows we are seeing today did not come by accident. We need every available well to be productive,” he said.
On local refining, the minister noted ongoing mediation between refiners and producers under the Domestic Crude Supply Obligation in the PIA. He said the only sustainable solution was to boost production to meet both domestic and export demand, especially as Dangote Refinery and revamped NNPC plants increase capacity.
The minister’s warning comes as Nigeria records its highest output in years, climbing from under one million barrels per day three years ago to 1.8 million barrels now. He credited the surge to reforms, industry collaboration and oil workers’ dedication, noting the government’s short-term target of 2 million barrels daily.
Lokpobiri also explained that Nigeria’s refineries should blend Bonny Light with cheaper crude grades to maximise returns, describing it as “one of the most expensive crudes in the world.”
He reaffirmed that President Bola Tinubu, as substantive Petroleum Minister, had mandated him to sustain output growth. “We have added about 80 percent to production, but this is only the beginning. Oil must continue to power economic growth and strengthen Nigeria’s global position,” he said.
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