FG to Reclaim Dormant Oil Fields, Begins License Review
The Federal Government has declared an end to what it described as the “era of speculative licensing,” where companies acquire oil blocks but fail to develop them, hence putting an end to dormant oil fields.
This came as the Nigerian National Petroleum Company Limited revealed the breakthroughs in tackling pipeline vandalism and ensuring full availability of key crude oil pipelines. It, however, lamented that despite this, Nigeria’s crude production still lags behind government targets.
The state-owned firm on Tuesday announced that five of its major crude evacuation pipelines achieved 100 per cent availability between May and June 2025, a milestone in the ongoing efforts to stabilise Nigeria’s oil infrastructure.
The pipelines include the Trans-Niger Pipeline, Oando Brass Pipeline, Trans Forcados Pipeline, Trans Escravos Pipeline, and the Trans Ramos Pipeline, all of which traverse critical economic corridors in the Niger Delta and are essential for moving crude oil from wellheads to terminals for export.
However, despite these gains, the NNPCL Group Chief Executive Officer, Bayo Ojulari, lamented that oil producers have failed to ramp up output to meet the national production target of 2.02 million barrels per day as projected in the 2025 budget.
In response, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, declared an end to what he described as the “era of speculative licensing,” where companies acquire oil blocks but fail to develop them.
The nation’s leading oil sector officials disclosed this while addressing industry stakeholders, investors, and government representatives at the ongoing 24th edition of the Nigeria Oil and Gas Energy Week in Abuja.
The event is themed, “Accelerating Global Energy Progress Through Investment, Partnerships & Innovation”.
Recall that Nigeria has consistently struggled to meet its Organisation of Petroleum Exporting Countries crude production quota, falling short by hundreds of thousands of barrels daily due to a combination of oil theft, underinvestment, and operational inefficiencies.
In May 2025, the Nigerian Upstream Petroleum Regulatory Authority disclosed that Oil production in Nigeria decreased to 1,452,941 barrels of oil per day, representing a 2.20 percent drop compared to the 1,485,700 bpd in April.
The development underscores the broader challenges facing Nigeria’s oil and gas sector, where underinvestment, regulatory bottlenecks, and dormant licenses have continued to hamper growth despite improved midstream infrastructure.
Speaking in his keynote address, which marks his first since his appointment by President Bola Tinubu, the GCEO announced a full recovery in pipeline infrastructure security and capacity across the country.
According to him, as of June 29, 2025, the country had achieved 100 per cent pipeline availability, a feat he described as “previously unthinkable” given the long history of sabotage and vandalism in the sector. However, he noted that while pipeline access is no longer a constraint, the country’s oil production levels remain below potential.
He said, “For years, whenever we gathered at this event, we lamented the insecurity around our pipeline network and its impact on crude oil production. But I am pleased to share with you today that, through the collective efforts of the federal government, regulatory bodies, the military, and the industry, we have 100 per cent pipeline availability today.
“As of last month, we averaged 1.35 million barrels per day in crude production, and with condensates, it came to about 1.6mbpd. So now that the pipelines are available, the question becomes: where is the production?”
Ojulari attributed the suboptimal output to years of underinvestment, warning that Nigeria must urgently attract new capital into the oil and gas sector to take full advantage of the restored infrastructure and favourable market dynamics.
“We have solved the infrastructure bottleneck, now we need investments to raise production. The stars are beginning to align, and this is the time to act,” he said.
The GCEO called on both local and international investors to take advantage of Nigeria’s improved pipeline security, regulatory reforms, and expanding gas infrastructure to commit fresh capital to upstream and midstream projects.
Ojulari also announced a breakthrough in its ongoing $2.8bn Ajaokuta-Kaduna-Kano gas pipeline project, confirming that contractors have successfully crossed the River Niger, a critical milestone that had previously posed significant technical and commercial challenges.
However, industry experts have disputed that the availability of pipelines may not actively translate to optimal crude transportation.
An energy analyst, Kelvin Emmanuel, said, “That the pipeline has a 100 per cent uptime doesn’t mean they can account for every hydrocarbon that comes to the surface. There are unaccounted barrels between the surface and the terminal. The availability of a pipeline doesn’t mean that all the crude oil that they drill goes to the terminal. It just means the pipeline is available to transport crude. What happens when the crude enters the pipelines is a separate thing entirely.
“You can still punch a hole to steal crude oil, there are still several things that can be done, and you won’t know it is leaking. So, pipeline availability just means it is available for you to transport.”
The Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah also stated, “theft and sabotage is another cankerworm eating up our crude deposits. A holistic approach is paramount, theft of crude is a persistent problem, and it is driven by collaborative efforts between host communities and cronies in the Government. NNPCL’s efforts to fix the pipelines are great, but if theft and sabotage are not tackled head-on, our production output won’t exceed 1.5m bpd.”
Speaking further at the conference, the oil minister, Lokpobiri, warned that the government would no longer tolerate operators lacking the technical and financial capacity to develop oil fields, stressing that such licenses would be withdrawn.
He also revealed that the government has engaged a consultant who is a member of the Oil Producing Trade Section to work in partnership with the NUPRC to harmonise the 273 fees in the oil and gas industry.
The consultant has been mandated to study the fees of other oil-producing countries and fashion the Nigerian fees after them in line with international best practices. Lokpobiri said that without the harmonisation of the fees, investors would avoid Nigeria for other climes.
He said, “And we agreed that there should be an international consultant to benchmark our fees away with other countries in the world so that we can be competitive. Otherwise, nobody would come and invest in a place where there would be 272 fees arranged and more were coming.”
He explained that the government was determined to maximise oil production by ensuring that only serious investors retain access to Nigeria’s hydrocarbon resources.
Lokpobiri said, “It is no longer acceptable for critical national resources to remain in the hands of companies that lack the technical or financial capacity to optimise them or worse, those who use such licenses merely as a lever to access scarce capital, only to divert it to unrelated ventures.
“Our oil and gas industry has witnessed far too many cautionary tales of this nature, and we must now draw a clear line. Let’s be clear: Joint Ventures and Financial/Technical Services Agreements are not weapons to hold the sector hostage. They are frameworks built on trust that you will act in the nation’s best interest. If you cannot, it’s time to step aside or step up through partnership.
“In this regard, the Federal Government is prepared to re-evaluate existing partnerships in the oil and gas sector to ensure that they align with our strategic national objectives for resource development and economic value creation.”
The Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, said Nigeria had proven gas reserves of over 200 trillion cubic feet, yet value would only be created when resources were developed and utilised
Ekpo said that through the Decade of Gas initiative, the country was focused on translating its vast gas wealth into tangible socio-economic benefits.
This, he said, included driving industrialisation, expanding power generation, increasing domestic Liquefied Petroleum Gas usage, deepening gas-to-transport adoption, and growing gas export capacity.
The week-long event gathers momentum and approaches its peak, high-level discussions and strategic deliberations are still ongoing among key stakeholders.
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