Federal government warns oil block license holders

The Federal Government has issued a stern warning to oil block license holders who have failed to secure investment or begin exploration activities, stating that their licenses will be revoked if they do not take immediate action.

Heineken Lokpobiri, the Minister of State for Petroleum Resources, made this clear on Wednesday in Abuja while addressing the challenges in Nigeria’s oil and gas sector.

Lokpobiri revealed that out of the 60 licenses issued in the recent oil block bidding, only 10 companies have successfully attracted investment and commenced exploration.

Read Also:

Black market Dollar to Naira exchange rate for today August 22nd 2024

Why FG increased Nigerian passport processing fees

He criticized companies that hold Oil block license without securing the necessary funding for exploration, describing such practices as pointless.

“I’ve always said if the upstream doesn’t succeed, the midstream and downstream will fail. And we have people who are holding licenses as souvenirs. If those people do not use the licenses given to them to raise funds and extract crude oil, we will take it back,” Lokpobiri stated.

He emphasized the need to revoke licenses from companies that are not adding value to Nigeria and reallocating them to those with the capacity to invest and explore.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had earlier announced the start of the 2024 oil block licensing round to boost the exploitation of Nigeria’s estimated 37.5 billion barrels of crude oil and 209.26 trillion cubic feet of natural gas reserves. This move aims to counter the flow of investments to African rivals like Angola and Namibia.

Nigeria, an OPEC member, has seen its oil production decline from around 2 million barrels per day a decade ago to just over 1.4 million barrels per day. As major oil companies shift focus to deepwater fields, the government is working to attract new investments to sustain and grow its oil sector.