By Obinna Uballa
The Federal Government has threatened to withdraw oil operating licences from companies that have failed to demonstrate the financial and technical capacity to produce crude, warning that idle assets undermine Nigeria’s push to ramp up output.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, issued the warning on Wednesday in Abuja while addressing the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Energy and Labour Summit.
Lokpobiri said the government had recently awarded operating licences to several firms with the potential to add at least 120,000 barrels per day to national output, but “less than half” have invested enough to commence production.
“The Petroleum Industry Act (PIA) is very clear, it’s either you drill or you drop out,” the minister declared. “Why should we keep licences with people who applied for them but have shown no capacity to invest? We need every available well producing as part of deliberate steps to raise output.”
He revealed that some firms had already applied for extensions but questioned the rationale. “Why should I extend the licences of those who have not shown capacity? Am I doing them any favour? Or do we continue to allow people to wear the best suits, attend conferences around the world, and waste money they don’t have — instead of reallocating those assets to companies with proven technical and financial capacity?”
On the domestic refining challenge, the minister said government was constantly mediating between producers and refiners under the PIA’s Domestic Crude Oil Supply Obligation, where refiners seek lower prices while producers demand market-driven rates. He argued that the only lasting solution is to boost volumes.
“The government has created the best investment environment in years. What we need now is output. Without higher production, we cannot meet both our local refining needs and international obligations,” he said.
Speaking on global dynamics, Lokpobiri noted that despite calls for energy transition, major oil producers are still ramping up. “At OPEC headquarters in Vienna just weeks ago, ministers and experts agreed that oil will remain the dominant energy source for the next 50 years. Even countries urging us to slow down are not reducing their own production. The United States produces over 20 million barrels daily. Europe and China are also increasing output,” he said.
He added that while Nigeria has made significant progress in gas flaring penalties, climate laws and sustainable exploration compared to peers, Africa remains a victim of global emissions. “The entire continent contributes barely 3% of global emissions, yet we are under pressure to cut back, while the UK alone contributes over 4%. We shouldn’t run faster than those responsible for the problem,” Lokpobiri added.
