FG Declares End to Dormant Oil Fields, Vows to Revoke Licenses to Boost Production

The Federal Government has issued a stern warning to oil and gas firms holding undeveloped oil field licenses, declaring an end to the “era of speculative licensing” and vowing to withdraw permits from operators who fail to actively develop their assets. This decisive stance, aimed at boosting Nigeria’s crude oil production, was announced by the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, at the ongoing 2025 Nigeria Oil and Gas (NOG) Energy Week in Abuja.

Lokpobiri emphasized that it is no longer acceptable for critical national hydrocarbon resources to remain in the hands of companies lacking the technical or financial capacity to optimize them. He also condemned the practice of firms acquiring licenses merely to leverage scarce capital, only to divert funds to unrelated ventures.

“Our oil and gas industry has witnessed far too many cautionary tales of this nature, and we must now draw a clear line,” the Minister stated on Wednesday. “We are determined to maximize oil production by ensuring that only serious investors retain access to Nigeria’s hydrocarbon resources.”

The move aligns with President Bola Tinubu’s directive for the immediate reactivation of dormant oil assets across the country to ramp up dwindling crude oil production. Nigeria aims to meet its OPEC production quota of 1.5 million barrels per day and targets a national output of 2.06 to 2.1 million barrels per day by the end of 2025. Current production figures, at around 1.63 million barrels per day (including condensates) in May 2025, still fall short of these ambitious targets.

The Minister highlighted that despite reforms introduced by the Petroleum Industry Act (PIA) and increased investor confidence, production has not significantly improved. He reiterated the implementation of a “drill or drop” policy, where operators must either commence production within a stipulated timeframe or relinquish their licenses.

As part of efforts to streamline the industry and attract genuine investors, Lokpobiri revealed that the government has engaged an international consultant to evaluate the 273 fees and rates currently levied on oil companies. This review aims to harmonize the fees and align them with international best practices, thereby creating a more conducive environment for investment and operations.

Despite the challenges in oil production, the Nigerian National Petroleum Company Limited (NNPC Ltd) announced a significant breakthrough, achieving 100% crude oil pipeline availability across five major evacuation lines in June 2025. This critical improvement in security and infrastructure is expected to provide a clearer path for increased crude evacuation once production from fields ramps up.

The government’s stern warning signals a new era of accountability in Nigeria’s upstream oil sector, where operators will be required to demonstrate tangible progress in developing their assets or face license revocation, paving the way for more capable investors to contribute to the nation’s energy security and economic growth.