The Federal Government has declared an end to the practice of holding oil and gas assets without developing them, warning operators that they must invest in production or risk losing their licences under the drill-or-drop provisions of the Petroleum Industry Act (PIA).
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said the policy was designed to ensure that petroleum licences translate into actual exploration, development and production rather than remain dormant in the hands of asset holders.
According to Lokpobiri, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) now has the authority to recover undeveloped assets and make them available to investors with the financial capacity and technical expertise to bring them into production.
The position signals a stronger regulatory approach to unlocking Nigeria’s petroleum potential at a time when the country is seeking to attract fresh investment, raise output and maximise government revenue from the oil and gas industry.
Under the drill-or-drop framework, operators are expected to meet their licence obligations and demonstrate progress in developing assigned assets. Companies that fail to do so could face the loss of their rights, subject to the applicable legal and regulatory processes.
The government’s position is also intended to discourage speculative asset ownership, where licences are retained without the investment required to move projects towards commercial production.
Kachikwu recalls investment bottlenecks
Meanwhile, former Minister of State for Petroleum Resources and former Group Managing Director of the Nigerian National Petroleum Corporation, Prof. Ibe Kachikwu, has recalled how government interference and lengthy approval procedures slowed decision-making and constrained investment during his tenure at the national oil company.
His remarks highlight the institutional challenges that have historically affected project delivery and investment decisions in Nigeria’s petroleum sector.
Industry observers have long pointed to regulatory uncertainty, lengthy approvals, funding constraints and overlapping institutional responsibilities as factors that can delay oil and gas projects and increase development costs.
Reducing such bottlenecks, alongside enforcing licence obligations, will be important to translating Nigeria’s resource base into higher production and stronger economic returns.
FG targets greater value from gas reserves
In the gas sector, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, said Nigeria must turn its estimated 215 trillion cubic feet of proven gas reserves into increased domestic supply, stronger infrastructure and industrial growth over the next five years.
The government’s ambition will require sustained investment in gas gathering, processing, transportation and distribution infrastructure, as well as policies that encourage reliable supply to power plants, manufacturers and other industrial users.
Expanding domestic gas availability could support electricity generation, reduce energy constraints for businesses and create opportunities for gas-based industries.
However, the scale of the opportunity will depend on the pace of infrastructure development, the availability of financing, commercial arrangements and a stable regulatory environment.
Taken together, the government’s emphasis on recovering undeveloped petroleum assets and expanding domestic gas utilisation reflects a broader effort to move Nigeria’s oil and gas sector from resource ownership towards productive investment.
