FG may Revoke Unused Oil Well Licenses Over $30 Billion Loss

Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri google

The Federal Government has announced intentions to seize all unused oil wells from operators holding onto them and has issued a warning to revoke licenses of individuals and companies unwilling to commence oil exploration.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, revealed these plans on Monday during an event organized by The Petroleum Club in Lagos. He highlighted that Nigeria has suffered a loss of approximately $30 billion due to reduced oil production over the past two and a half years.

Presenting an opening speech at the event, Mr. Austin Avuru, Chairman of The Petroleum Club, expressed apprehension regarding the country's declining oil production, contrasting figures provided by the government with those of the Organization of the Petroleum Exporting Countries (OPEC).

Minister Lokpobiri expressed further concern over the Seplat/ExxonMobil crisis, citing a daily loss of 480,000 barrels of crude oil production. He emphasized that this decline has led to substantial financial losses for the nation.

Previously, ExxonMobil and Seplat Energy had announced a $1.6 billion sales agreement in 2022. However, the Nigerian Upstream Petroleum Regulatory Commission intervened, exercising its right of pre-emption, which led to the cancellation of the deal.

Lokpobiri stressed the importance of increasing oil production to stimulate economic growth, as per the mandate from President Bola Tinubu. He emphasized the need to allocate idle oil wells to capable operators to boost production.

The minister also expressed disappointment over the lack of progress from companies that obtained licenses in the last marginal bid round. He warned of potential license cancellations for those failing to adhere to their work plans.

Lokpobiri criticized the practice of holding licenses without utilizing them, vowing to allocate them to productive operators. He urged a shift in approach to oil sector investments, advocating for collaboration and local funding initiatives.

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