The Nigerian government is set to enforce the drill-or-drop rule from the Petroleum Industry Act, requiring oil companies to either start production or relinquish inactive wells. Minister Heineken Lokpobiri emphasized the need for increased investment in the sector to improve production and ensure energy security.
The Nigerian government has announced plans to enforce the drill-or-drop rule under the Petroleum Industry Act (PIA), requiring oil companies to either develop idle wells or forfeit them. Minister of State for Petroleum Resources, Heineken Lokpobiri, stated at an industry meeting in Italy that the move aims to boost oil production and encourage investment.
According to the PIA, oil companies must begin production within three years of acquiring a field, or they risk losing the asset. Lokpobiri emphasized that the Tinubu administration has implemented policies to create a business-friendly environment, and it is now up to international oil companies (IOCs) to commit to increasing investment in Nigeria’s oil sector.
He acknowledged concerns raised by IOCs regarding challenges in engineering, procurement, and construction but insisted that suppliers will only engage when they see firm commitments from operators. The minister stressed that boosting production is essential for maintaining a stable domestic crude supply, which is vital for Nigeria’s energy security and economic growth.
To maximize efficiency, Lokpobiri urged oil firms to collaborate on infrastructure for closely located assets and release unproductive fields to investors willing to develop them. He reiterated that the government has provided the necessary incentives, and oil companies must now take action to ensure long-term sustainability in the sector.
