The federal government has called on major oil companies operating in the country to reciprocate its efforts in enhancing the investment climate by committing tangible investments to the sector.
This appeal comes after significant reforms aimed at improving regulatory stability and fiscal competitiveness in the oil and gas industry.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, who made this call urged the International Oil Companies (IOCs) to ramp up investments in the country’s oil and gas sector, emphasising that the administration of President Bola Ahmed Tinubu has provided every necessary incentive to ensure seamless and profitable operations.
Speaking during the Cross Industry Group (CIG) Meeting held in Florence, Italy, organised by IOCs operating in Nigeria, Lokpobiri reiterated that the federal government will begin implementing the “drill or drop” provisions of the Petroleum Industry Act (PIA) where necessary.
The meeting focused on challenges, expectations, and strategies to enhance the sector’s contributions to domestic energy needs and regional expansion across Sub-Saharan Africa.
He noted that while IOCs have pointed to Engineering, Procurement, and Construction (EPC) contractors as a challenge, EPCs will only commit when they see strong investment decisions from industry players.
“The Government has done its part by providing the requisite and investment-friendly fiscal policies, including the President’s Executive Order incentivising deepwater 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,” the minister stated.
He further emphasised the need for IOCs to support local refining efforts, noting that more refineries are coming on stream and will require a steady supply of crude oil. To make this easy and possible, he stressed that ramping up production will enable Nigeria to meet both local and international obligations.
In recent years, Nigeria has implemented key legislative changes, including the Petroleum Industry Act (PIA) 2021, which seeks to provide a more conducive environment for growth in the sector. Additionally, President Bola Tinubu’s administration has issued executive orders to streamline project execution timelines and reduce production costs, attracting major investments such as the $5 billion Bonga North project by Shell.
The government is optimistic about securing more Final Investment Decisions (FIDs) in 2025, following a successful 2024 that saw Nigeria secure three out of Africa’s four FIDs, valued at over $5.5 billion. With a focus on deepwater operations and gas-based industries, Nigeria aims to increase oil production and remain competitive among global oil and gas investment destinations. The government emphasises that while it has done its part to create an attractive investment environment, the industry must now step up with substantial investments to drive economic growth and energy security.
In line with the federal government’s drive to boost production.
“We cannot continue to have assets sitting idle for 20 to 30 years without development. If you are not utilizing an asset and it remains underdeveloped for decades, it neither adds value to your books nor to us as a country. 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. Otherwise, like any responsible government, we will take back these assets and allocate them to those willing to go to work,” he said.
The minister also urged operators to consider farm-out agreements where assets are close to existing infrastructure, rather than incurring high costs on new Floating Production Storage and Offloading (FPSO) units.
The chairman of the Oil Producers Trade Section (OPTS), Osagie Osunbor, commended the minister for his direct engagement with industry players and for the federal government’s continued efforts in advancing the sector.
“We appreciate the government’s commitment to creating a conducive environment for investment. The minister’s engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production,” Osunbor stated.
The federal government remains committed to ensuring a thriving oil and gas industry and expects operators to match its commitment by making tangible investment decisions that will drive growth, sustainability, and national energy security.
