FG to Revoke Idle Oil Blocks, Targets 2.06 Million Barrels Daily by 2025

The Federal Government has set a production target of 2.06 million barrels of oil per day by 2025. In pursuit of this goal, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has threatened to withdraw oil blocks from owners who fail to develop them.

Senator Lokpobiri announced the government’s intention to enforce the “drill or drop” provisions of the Petroleum Industry Act (PIA) as part of efforts to boost oil production. As of February 2025, Nigeria’s oil production stood at 1.67 million barrels per day, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The Minister made this statement during a Cross Industry Group meeting held in Florence, Italy, organized by International Oil Companies (IOCs) operating in Nigeria. The event focused on addressing challenges, setting expectations, and strategizing ways to enhance the sector’s contributions to domestic energy needs and regional expansion across Sub-Saharan Africa.

Lokpobiri emphasized the government’s stance on underutilized assets, stating that leaving oil blocks idle for decades neither benefits the owners nor the nation. He encouraged industry players to consider collaborative strategies, such as shared resources for neighboring assets, farm-outs, or releasing underutilized assets to operators willing to invest in production.

The Minister also advocated for the use of farm-out agreements for assets close to existing infrastructure, rather than incurring high costs on new Floating Production Storage and Offloading (FPSO) units. He urged IOCs operating in Nigeria to increase investment, highlighting that the administration of President Bola Ahmed Tinubu has provided necessary incentives for smooth and profitable operations.

Lokpobiri noted that while IOCs have cited challenges related to Engineering, Procurement, and Construction (EPC) contractors, these contractors are more likely to commit when they see strong investment decisions from the oil companies. He pointed out that the government has played its part by implementing investment-friendly fiscal policies, including an Executive Order to incentivize deepwater investments.

The Minister stressed the importance of increasing crude production to support local refining efforts, as more refineries are coming online and will require a consistent supply of crude oil to meet both local and international demands.

Chairman of the Oil Producers Trade Section (OPTS), Mr. Osagie Osunbor, commended the Minister’s proactive approach and acknowledged the government’s commitment to creating a favorable environment for investment. He expressed appreciation for the government’s direct engagement with industry stakeholders and pledged to intensify efforts to boost production.