The Federal Government has urged International Oil Companies (IOCs) operating in Nigeria to scale up investments in the country’s oil and gas sector, emphasizing that the administration of President Bola Ahmed Tinubu has put in place necessary incentives to facilitate seamless and profitable operations.
Speaking at the Cross Industry Group (CIG) Meeting in Florence, Italy, organized by IOCs operating in Nigeria, Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, underscored the government’s commitment to fostering a conducive investment climate.
According to a statement issued by Nneamaka Okafor, Special Assistant on Media and Communication to the Minister, the discussions at the meeting centered on challenges, expectations, and strategies to bolster the sector’s contributions to Nigeria’s energy security and regional expansion in Sub-Saharan Africa.
Addressing industry concerns, Lokpobiri acknowledged that Engineering, Procurement, and Construction (EPC) contractors have been cited as a key challenge but stressed that EPCs will only commit when there are strong investment decisions from industry stakeholders.
“The government has fulfilled its role by implementing investment-friendly fiscal policies, including the President’s Executive Order incentivizing deepwater investments. The responsibility now lies with IOCs and other operators to make strategic investment decisions that will drive production growth and sustainability,” Lokpobiri said.
The Minister also highlighted the importance of supporting local refining efforts, noting that with new refineries coming on stream, a steady supply of crude oil will be essential. He urged oil companies to boost production to meet both domestic and international supply obligations.
As part of the government’s strategy to enhance production, Lokpobiri reaffirmed plans to enforce the “drill or drop” provisions of the Petroleum Industry Act (PIA), which mandates the development of oil assets.
“We cannot allow assets to remain undeveloped for 20 to 30 years. If an operator fails to utilize an asset, it neither benefits the company nor the country. We encourage collaboration through shared resources, farm-outs, and the reassignment of underutilized assets to willing investors. Otherwise, as a responsible government, we will reclaim such assets and allocate them to those ready to develop them,” he warned.
The Minister also urged companies to explore farm-out agreements, particularly in cases where assets are close to existing infrastructure, to avoid incurring high costs on new Floating Production Storage and Offloading (FPSO) units.
Chairman of the Oil Producers Trade Section (OPTS), Osagie Osunbor, commended the Minister for his engagement with industry stakeholders and acknowledged the government’s efforts in advancing the sector.
“We appreciate the government’s commitment to fostering a favorable investment environment. The Minister’s direct engagement has provided valuable insights and has challenged us, as industry players, to intensify our efforts in boosting production,” Osunbor stated.
The Federal Government remains steadfast in its commitment to a thriving oil and gas industry and expects operators to reciprocate by making tangible investment decisions that will drive growth, sustainability, and national energy security.
