Nigeria to Enforce “Drill or Drop” Policy to Boost Oil Production – Lokpobiri

The Federal Government has announced plans to enforce the “drill or drop” provisions of the Petroleum Industry Act (PIA), which empowers the government to take over idle assets abandoned by oil firms for an extended period.

The Minister of State for Petroleum Resources, Sen. Heineken Lokpobiri, disclosed this at the Cross Industry Group (CIG) Meeting in Florence, Italy on Tuesday.

According to Lokpobiri, the decision is part of efforts to boost production in Nigeria.

“We cannot continue to have assets sitting idle for 20 to 30 years without development. If you are not utilizing an asset, it neither adds value to your books nor to us as a country.

“We will take back these assets and allocate them to those willing to invest,” he cautioned.

“The government is encouraging industry players to consider farm-out agreements or collaborate on shared infrastructure instead of incurring high costs on new Floating Production Storage and Offloading (FPSO) units.

“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,” Lokpobiri said.

Lokpobiri also called on International Oil Companies (IOCs) operating in Nigeria to increase their investments in the country’s oil and gas sector.

“The government has done its part by providing the requisite and investment-friendly fiscal policies, including the President’s Executive Order incentivizing deep water investments.

“Now, the ball is in the court of the IOCs and other operators to make strategic investment decisions that will drive increased production and sustainability in the sector,” he said.

The Chairman of the Oil Producers Trade Section (OPTS), Osagie Osunbor, commended the government’s engagement with industry players and acknowledged the need for increased investments.

“The minister’s engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production,” Osunbor said.