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Oil Production: FG  to withdraw licence of firms with dormant oil fields 

The Federal Government of Nigeria has announced plans to withdraw licenses from oil companies with dormant oil fields. This move aims to boost national oil production and meet the country's OPEC production quota and 2025 budgetary targets.

By Rhalialt Arhuoizah 

*Key Points:*

- *Dormant Licenses:* The government will no longer tolerate oil companies acquiring field licenses and leaving them undeveloped due to lack of technical or financial capacity.
- *License Withdrawal:* Companies that fail to develop oil fields will have their licenses revoked, ensuring that only dedicated investors with the necessary capacity retain access to Nigeria's hydrocarbon resources.
- *Review of Fees:* The government has engaged an international consultant to evaluate the 273 fees and rates faced by oil companies in the country, aligning them with international best practices to promote investment and growth in the sector.
- *Implementation:* The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced plans to enforce the "drill or drop" policy, requiring operators to commence production within a set timeframe or risk losing their licenses .

*Rationale:*

The government's decision is driven by the need to :
- *Maximize Oil Production:* Ensure maximum value is derived from upstream assets currently held by operators.
- *Promote Investment:* Attract serious investors who can develop oil fields and contribute to the country's economic growth.
- *Enhance Revenue:* Increase government revenue through optimal use of oil assets and boost economic development.

This move is expected to revitalize the oil sector, promote effective utilization of oil assets, and increase government revenue .