ABUJA, Nigeria (VOICE OF NAIJA)- The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has warned that oil blocks belonging to companies that fail to develop them may be withdrawn.
This comes as the Federal Government urges international oil companies operating in Nigeria to increase their investments in the country’s oil and gas sector, stressing that the current administration has provided all necessary incentives for smooth and profitable operations.
With a production target of 2.06 million barrels per day set for 2025, Lokpobiri stated that the government will begin enforcing the “drill or drop” provisions of the Petroleum Industry Act as part of efforts to boost oil production.
As of February 2025, the Nigerian Upstream Petroleum Regulatory Commission reported oil production at 1.67 million barrels per day.
In a statement issued on Tuesday by his media aide, Nneamaka Okafor, Senator Lokpobiri delivered the warning during a Cross Industry Group meeting in Florence, Italy, organized by international oil companies operating in Nigeria.
The meeting addressed industry challenges, expectations, and strategies to enhance the sector’s contributions to domestic energy needs and regional expansion across Sub-Saharan Africa.
The minister emphasized, “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.”
He further urged industry players to consider collaborative measures such as shared resources for contiguous assets, farm-outs, and the release of underutilized assets to operators ready to invest in production.
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“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 also encouraged operators to consider farm-out agreements for assets located near existing infrastructure rather than incurring high costs on new floating production storage and offloading units.
He urged industry players to increase their investments in the oil and gas sector, noting that while international oil companies (IOCs) have identified engineering, procurement, and construction (EPC) contractors as a challenge, EPCs will only commit when they see strong investment decisions from operators.
“The government has done its part by providing the requisite and investment-friendly fiscal policies, including the president’s executive order incentivising deepwater 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,” he said.
The minister also underscored the importance of IOCs supporting local refining efforts, highlighting that more refineries are coming online and will require a steady crude oil supply.
To facilitate this, he stressed that increasing production is essential for Nigeria to meet both local and international commitments.
Speaking at the meeting, the Chairman of the Oil Producers Trade Section (OPTS), Osagie Osunbor, praised the minister for his direct engagement with industry stakeholders and acknowledged the Federal Government’s ongoing efforts to advance the sector.
“We appreciate the government’s commitment to creating a conducive environment for investment. The minister’s engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production,” he stated.
Meanwhile, a Bloomberg report indicated that Nigeria implemented the most significant oil production cut among members of the Organisation of the Petroleum Exporting Countries (OPEC) in March, reducing output by 50,000 barrels per day.
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The report stated that Nigeria adjusted production to maintain an average of 1.5 million barrels per day in line with its OPEC quota, as the cartel urged tighter output limits among its members.
According to a Bloomberg survey, OPEC collectively reduced production by 110,000 barrels per day in March, with Iraq following Nigeria in making the second-largest cut, reducing output by 40,000 barrels per day to 4.15 million barrels—still above its agreed limit of 4 million barrels per day.
Conversely, the United Arab Emirates increased production by 30,000 barrels per day, surpassing its quota.
Meanwhile, OPEC+—led by Saudi Arabia and Russia—has signaled its readiness to gradually restore production and increase supplies to stabilize global oil prices.
The group is set to add approximately 138,000 barrels per day this month as part of a phased increase extending through late 2026.
The report also noted that Nigeria’s production cut was partly due to delays in loading Bonny Light crude following a recent explosion at the Trans-Niger Pipeline.
This pipeline, a critical infrastructure for Nigeria’s crude exports, has faced frequent operational disruptions, affecting the country’s ability to meet production targets.