Oil companies operating in Nigeria have been advised to make use of their idle oilfields and assets or consider leasing them out to avert being taken away from them by the federal government.
The Minister of State for Petroleum Resources (Oil), Mr. Heineken Lokpobiri, gave this warning, stressing that the government may be forced to enforce the “drill or drop” provision under the Petroleum Industry Act (PIA).
The drill or drop clause indicates that if a licensee doesn’t drill a well within a specified time frame, they must relinquish their license or rights to the area to prevent hoarding of exploration rights without actual development.
Speaking during an inspection tour of the Nigerian National Petroleum Company (NNPC) Limited/Chevron Joint Venture Escravos Gas-to-Liquids, EGTL, facility in Delta State, Mr Lokpobiri reiterated Nigeria’s commitment to balancing fossil fuel production with cleaner and greener technologies.
Despite the threat, he assured international oil companies and domestic operators of continued government incentives to attract fresh investments into the country’s oil and gas sector.
“We will continue to provide incentives that ensure Nigeria remains an attractive destination for investors. I encouraged operators to deepen their investments and ramp up production to meet both domestic and international obligations.”
The Minister emphasized that while the world is shifting towards renewable energy, fossil fuels will continue to play a critical role in meeting global energy demand for the foreseeable future.
“Fossil fuel will remain relevant for the foreseeable future; however, we will consistently advocate for cleaner and greener exploration. The EGTL project is a commendable example, as it significantly reduces emissions while contributing to economic growth.”
He further urged oil companies to optimize asset utilization to improve Nigeria’s production volumes.
“I urged other operators to explore all avenues to increase production, including farming out unused assets to those with the financial capacity to utilize them effectively, as the Government have right to enforce the ‘drill or drop’ provision under the PIA in our effort to maximizing the sector’s potential responsibly,” the Minister warned.
The inspection tour was attended by senior executives of the Chevron/NNPC joint venture, including Chevron Nigeria’s Chairman and Managing Director, Mr. Jim Schatz, and NNPC/CNL JV Director, Mr Segun Kuteyi.
The Minister’s remarks underscore the federal government’s dual-track policy of incentivizing new capital inflows while also tightening compliance obligations on license holders.
SOURCE: businesspost.ng
