Ken Okeke
Nigeria is dangling Section 94 of the Petroleum Industry Act (PIA) which offers a three-year period to operators to commence oil production or face the risk of having their assets relinquished to the federal government.
The Minister of State for Petroleum Resources Heineken Lokpobiri, has out it to those delaying field optimization that the Federal Government is now ready to commence enforcing the drill-or-drop provisions of the PIA.
Under Section 94 of the PIA, oil operators are given a three-year period to commence oil production or face the risk of having their assets relinquished to the federal government.
Lokpobiri made this announcement during his speech at the Cross Industry Group (CIG) meeting in Florence, Italy, on Tuesday, where he highlighted that it is in the nation’s best interest for all idle wells to be brought into active production.
He reassured stakeholders that under President Bola Tinubu’s leadership, the government has provided all the necessary incentives to ensure the smooth operation of international oil companies (IOCs) in Nigeria.
He emphasized that it is now crucial for these operators to align with the government’s efforts by making final investment decisions (FIDs) to boost oil production.
Lokpobiri also discussed the challenges facing the sector, including issues with engineering, procurement, and construction (EPC) contractors. He noted that EPC contractors would not be attracted unless they see strong commitments from the industry players.
He stressed that the government has already made strides in providing investment-friendly fiscal policies, but now it is up to the IOCs and other operators to make the strategic investments needed to drive growth and sustainability in the sector.
The Minister further emphasized the importance of domestic crude supply for Nigeria’s energy security, stressing that increasing oil production is the best way to balance the country’s domestic energy needs with external commitments. Lokpobiri called for collaboration among industry players, urging them to consider shared resources for contiguous assets and to release underutilized assets to operators willing to invest in production.
This move marks a significant step in ensuring that Nigeria’s oil industry remains competitive, sustainable, and aligned with national energy security goals.