Federal government is set to commence implementing the drill-or-drop provisions of Petroleum Industry Act (PIA).
Gatekeepers News reports that Heineken Lokpobiri, minister of state for petroleum resources disclosed this while speaking during the Cross Industry Group (CIG) meeting held on Tuesday in Florence, Italy.
Section 94 of the PIA gives operators three years to begin oil production or relinquish the assets to the federal government.
The minister noted that it is in the best interest of the country that all inactive wells go to work.
He added that the federal government, under the leadership of President Bola Ahmed Tinubu, has provided every necessary incentive to ensure international oil companies (10Cs) in Nigeria run smoothly and profitably.
Lokpobori said, “Now, it is imperative for these industry players to match the government’s efforts with increased investment by announcing final investment decisions (FIDs).”
He also highlighted the challenges, expectations, and measures to enhance the sector’s contributions towards domestic energy needs and regional expansion across Sub-Saharan Africa.
The minister emphasised that while IOCs have highlighted engineering, procurement, and construction (EPC) contractors as a challenge, “EPCs will not come unless they see strong commitments from industry players.”
He said, “The government has done its part to provide the requisite and investment-friendly fiscals, the ball is now in the court of the IOCs and other operators to make strategic investment decisions that will drive increased production and sustainability in the sector.”
“We must also recognise that domestic crude supply is essential to national energy security.
The best solution to this challenge lies in increasing production, which will ensure a balance between domestic supply obligations and external commitments.”
The minister urged industry players to explore collaborative measures, such as shared resources for contiguous assets and the release of underutilised assets to operators ready to invest in production.
