FG Cracks Down on Abandoned Oil Assets

By Achimi Muktar

The Nigerian government has declared its intention to reclaim idle oil assets abandoned by firms, signaling a major shake-up in the country’s petroleum sector. The move, aimed at boosting production and attracting fresh investment, is part of the enforcement of the "drill or drop" provisions under the Petroleum Industry Act (PIA).

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, made this known at the Cross Industry Group (CIG) Meeting in Florence, Italy, where he met with key players in the energy industry. He stressed that Nigeria would no longer tolerate oil firms sitting on undeveloped assets for decades.

"No More Dormant Fields"

Lokpobiri issued a stern warning to oil operators, making it clear that idle assets would be reassigned to serious investors willing to develop them.

"We cannot continue to have assets sitting idle for 20 to 30 years without development," he said. "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."

To maximize resource utilization, the government is also encouraging oil firms to consider farm-out agreements—allowing smaller companies to develop underutilized assets—or to collaborate on shared infrastructure instead of spending heavily on new Floating Production Storage and Offloading (FPSO) units.

Nigeria to Oil Majors: Invest or Exit

Beyond reclaiming dormant oil fields, the government is urging International Oil Companies (IOCs) to ramp up investments in Nigeria’s energy sector. Lokpobiri pointed out that the administration of President Bola Tinubu has rolled out fiscal incentives, including executive orders aimed at promoting deep-water exploration.

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

Industry Leaders React

Reacting to the minister’s remarks, the Chairman of the Oil Producers Trade Section (OPTS), Osagie Osunbor, praised the government’s commitment to engagement with industry players.

"The minister’s engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production," Osunbor told the News Agency of Nigeria.

The Bigger Picture

Nigeria remains Africa’s largest oil producer, yet its oil output continues to face significant challenges, including aging infrastructure, rampant oil theft, and declining investments. By enforcing the PIA’s "use it or lose it" provisions and offering incentives for new investments, the government hopes to revive the industry, ensuring both domestic energy security and sustained international exports.

With this new policy direction, oil firms in Nigeria must now make a choice—invest and produce or risk losing their assets to more committed players.