The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, on Tuesday read the riot act to oil companies operating in the country to either align with the federal government’s plans for the sector or relinquish their licenses, arguing that the problems of the industry were no longer governance-related.
Speaking at the ongoing Nigeria Oil and Gas (NOG) Week in Abuja, themed: “Accelerating Energy Progress Through Investment, Global Partnerships and Innovation,” Lokpobiri stressed that despite all the incentives provided by the Bola Tinubu administration, the oil companies have failed to raise production, despite several promises.
The minister insisted that it was unacceptable that certain individuals and corporate organisations will acquire the required permits to produce oil and gas, then hold on to them for years without adding to Nigeria’s total output.
He maintained that in the ongoing drive to boost national oil production, the federal government remains resolute in ensuring that maximum value is derived from upstream assets currently held by operators.
According to him, this objective has taken on greater urgency as global financing for oil and gas projects continues to tighten, making it increasingly difficult for all operators to secure the capital needed to develop these assets.
He said: “It is no longer acceptable for critical national resources to remain in the hands of companies that lack the technical or financial capacity to optimise them or worse, those who use such licenses merely as a lever to access scarce capital, only to divert it to unrelated ventures.
“Our oil and gas industry has witnessed far too many cautionary tales of this nature, and we must now draw a clear line. Let’s be clear: Joint Ventures and Financial/Technical Services Agreements (FTSAs) are not weapons to hold the sector hostage. They are frameworks built on trust that you will act in the nation’s best interest. If you cannot, it’s time to step aside or step up through partnership.
“In this regard, the federal government is prepared to re-evaluate existing partnerships in the oil and gas sector in order to ensure that they align with our strategic national objectives for resource development and economic value creation.”
According to him, the recent mandate by President Bola Tinubu to the new board of the Nigerian National Petroleum Company Limited (NNPC) to review all existing operatorship arrangements is not just an administrative exercise, but a clear signal for operators to sit up.
Besides, Lokpobiri insisted that operators must wake up to the responsibility they hold, pointing out that the era of dormant fields and underperforming assets must give way to action, unlock dormant and untapped assets and ensure re-entry of shut-in wells.
“It is worth noting, as a matter of strategic concern, that one company’s production volumes before the enactment of the Petroleum Industry Act (PIA) were higher than what we are all currently delivering today even with the full benefit of the incentives and business-friendly policies embedded not just in the PIA but, even with the presidential directives.
“So, this cannot be a governance problem. I want to put it to you, the operators, what happened? How did we get here? And more importantly, what are we going to do differently? We must confront a reality that cannot be ignored. Last year, we stood here and spoke passionately about increasing production. Yet today, we find ourselves asking: what has truly changed? What tangible difference has been made?” the minister asked.
He emphasised that the federal government has implemented far-reaching reforms, executive orders, fiscal incentives, streamlined regulatory processes to make the work of operators easier and investment more attractive, without commensurate output growth.
“We cannot continue this way. If we are serious about ramping up production and reclaiming Nigeria’s rightful place among leading oil producers, then every operator must show cause – by performance, not promises.
“We are not just chasing barrels. We are building an economy. One that reflects the aspirations of Nigerians, the commitment of this administration, and the immense potential of our resources.
“The government has done a lot, and is willing to do more, but the results must now speak for themselves. The responsibility is collective, but the obligation to deliver rests first with those holding the assets,” he stressed.
On the African Energy Bank (AEB), he noted that Nigeria was firmly on course and steadily approaching the official launch, explaining that with any institution of this magnitude, it is critical that Nigeria takes the time to cross the T’s and dot the I’s.
