The Federal Government has called on International Oil Companies (IOCs) to significantly increase their investments in Nigeria’s oil and gas industry, stressing that the administration of President Bola Tinubu has already provided the necessary incentives to ensure a seamless and profitable business environment.
Senator Heineken Lokpobiri, Minister of State for Petroleum Resources, made the call at the Cross Industry Group (CIG) Meeting in Florence, Italy, an event organised by IOCs operating in Nigeria. The meeting focused on addressing challenges, setting expectations, and devising strategies to boost the sector’s contribution to domestic energy needs and regional growth in Sub-Saharan Africa.
READ MORE: Tinubu sacks NNPC board, GCEO Mele Kyari
Sen. Lokpobiri pointed out that while IOCs have highlighted Engineering, Procurement, and Construction (EPC) contractors as a challenge, EPCs will only commit once they observe robust investment decisions from industry players. He emphasised that the Nigerian Government has already made the necessary fiscal policies, including the Presidents Executive Order incentivising deepwater investments, and now it is up to the IOCs and other operators to make strategic investments that will drive production and sustainability in the sector.
He further urged IOCs to support local refining efforts, as new refineries coming online will require a steady supply of crude oil. Increasing production, he said, would help Nigeria meet both its local and international obligations.
To bolster production, the Minister reiterated the government’s intention to implement the “drill or drop” provisions of the Petroleum Industry Act (PIA) where necessary. He warned against letting assets remain idle for decades without development, stating that this benefits neither the operators nor the country.
READ MORE: Tinubu appoints Bayo Ojulari as NNPC GCEO
“We cannot continue to have assets sitting idle for 20 to 30 years without development. If you are not utilizing an asset and it remains underdeveloped for decades, it neither adds value to your books nor to us as a country. We encourage industry players to explore collaborative measures such as shared resources for contiguous assets, farm-outs, and the release of underutilized assets to operators ready to invest in production. Otherwise, like any responsible government, we will take back these assets and allocate them to those willing to go to work,” he said.
The Minister also urged operators to consider farm-out agreements for assets located near existing infrastructure, rather than incurring the high costs associated with new Floating Production Storage and Offloading (FPSO) units.
READ MORE: How Africa can leverage Trumps return to boost oil investment
Osagie Osunbor, Chairman of the Oil Producers Trade Section (OPTS), praised the Minister for his direct engagement with industry players and commended the government’s ongoing efforts to create a conducive environment for investment.
“We appreciate the governments commitment to creating a conducive environment for investment. The Ministers engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production,” Osunbor stated.
You must be logged in to post a comment.
Why are you flagging this comment?
I disagree with this user
Targeted harassment - posted harassing comments or discussions targeting me, or encouraged others to do so
Spam - posted spam comments or discussions
Inappropriate profile - profile contains inappropriate images or text
Threatening content - posted directly threatening content
Private information - posted someone else''s personally identifiable information
Before flagging, please keep in mind that Disqus does not moderate communities. Your username will be shown to the moderator, so you should only flag this comment for one of the reasons listed above.
We will review and take appropriate action.
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardians leading coverage of Nigerian and world news, business, technology and sports.
Follow Us