The Federal Government has issued a strong warning to firms and individuals with oil block licenses who have failed to secure investment or undertake exploration activities, stating that their licenses will be revoked if they do not comply.
The State Minister of Oil, Heineken Lokpobiri, said this in a statement on Wednesday in Abuja while speaking on the challenges faced in the oil and gas sector.
Lokpobiri stated that out of the 60 licenses issued in the recent oil block bidding, only 10 companies have successfully attracted investment and started exploration.
He emphasized that retaining licenses for companies that merely hold them as “souvenirs” without securing the necessary funding for exploration is 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 be able to raise funds and then extract the crude oil from the soil, we better take it back from them.
“I see a lot of them everywhere in the world. They wear nice suits and speak grammar. But we have only improvised them more. They pay signature bonuses to the government, but they have no money. They have no wherewithal to be able to raise funds and do the real exploration.
“Those who benefited from the last bid rounds are almost 60. But today we have less than 10 of them who have been able to bring oil from the soil. Will you disagree with me that we should continue to leave these licenses with them when the licenses are not adding any value both to them and to Nigeria as a country?
“And if Heineken Lokpobiri is going to make enemies by ensuring that we revoke them and give to people who have the capacity,” Lokpobiri said.
What you should know
- In May, NUPRC announced the commencement of the 2024 oil block licensing round.
- The Commission is seeking to deepen the exploitation of the country’s estimated 37.5 billion barrels of crude oil and 209.26 trillion cubic feet of natural gas reserves.
- Nigeria is seeking to halt the flow of investments to African rivals Angola and Namibia by improving the ease of acquiring oil blocks.
- Nigeria, a member of the Organization of the Petroleum Exporting Countries (OPEC), has seen its oil production decline from around 2 million barrels a decade ago to just over 1.4 million barrels per day.
- Oil majors are leaving onshore fields – prone to sabotage and frequent claims for compensation for spills – to focus on deepwater fields where disruptions are less common.