Nigeria to begin revocation of dormant oil well licences

• To leverage technology to reduce oil theft
• NUPRC develops framework for IOCs’ divestment

The Federal Government has begun the withdrawal of oil well licences that are not producing, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has said.

Lokpobiri, who disclosed this in Abuja, yesterday, at the third Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Energy and Labour Summit, with the theme, ‘The future of Nigeria’s oil and gas industry: Energy Mix, Energy Security, Artificial Intelligence, Divestment, and Crude Oil Theft,’ said that the Federal Government would withdraw dormant crude oil licences.

He said: “One of the ways to increase production is for those utilising the oil wells to surrender them so that we can look for investors that can develop them for the benefit of the country. By doing this, we will be able to meet domestic obligations, and also export some to raise more dollars and meet our obligations in the country.”

The minister disclosed that Nigeria’s fiscal and legal regimes are globally competitive. He insisted that fossil fuels are not going into extinction, citing the United Kingdom (UK) example, which gave almost 100 licences last year, saying: “If they (Western world) truly believe that fossil fuels are going to go away, why would they be issuing new licences? Fossil fuel will remain for the next 50 to 100 years. No source of energy has ever gone away. But for us, we have an abundance of oil and gas.”

On the issue of oil theft, the minister maintained that Nigeria must leverage new technology to tame oil theft, saying: “But there are better technologies, which are more expensive. There are better pipelines that countries are using. But they are not cheap. We also need to change our model. What we are doing is to see how we can utilise every available field, every available well.”

Lokpobiri clarified that the International Oil Companies (IOCs) are not leaving Nigeria, but diversifying their portfolios from onshore and shallow waters to deep offshore, which holds more promises.

He revealed that the Commission has drafted a comprehensive divestment framework, as provided for in Section 95 of the Petroleum Industry Act to guide asset divestment.

He explained that the framework focuses on creating a standardised protocol to guide divestment processes while safeguarding the interests of the country, local host communities, and employees of the assets.

The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, who confirmed that IOCs are not leaving Nigeria, said that the migration to deep offshore presents risks and opportunities for Nigeria.