Key Highlights
- Federal Government warns it will revoke licenses for dormant oil blocks.
- No refunds of bid fees or signature bonuses will be given upon revocation.
- Minister of State for Petroleum Resources, Heineken Lokpobiri, emphasizes the need for timely asset development.
- The government aims to discourage speculative license holding and ensure efficient resource exploitation.
The Federal Government is poised to revoke licenses for oil blocks that have remained undeveloped, signaling a firm stance against speculative license holding. Minister of State for Petroleum Resources, Heineken Lokpobiri, issued the warning at the Licensing Round Pre-bid Conference in Lagos, emphasizing that licenses are not mere status symbols but government property that must be actively developed.
Lokpobiri stated that licensees who have held onto their assets for as long as 20 years without any significant development will face revocation. He further clarified that companies whose licenses are revoked should not expect any refunds of bid fees or signature bonuses. "Licenses are no longer status symbol. They belong to the government. Every licensee must develop the assets within the given time frame," he said.
The Minister also addressed concerns from prospective investors regarding the 2025 oil licensing bid round. He cautioned that mistakes or miscalculations during the bidding process will be at their own risk, as no refunds or asset swaps will be considered. This comes after the government received requests for refunds and asset exchanges following the 2020 bid round, which Lokpobiri dismissed as inconsistent with the provisions of the Petroleum Industry Act (PIA).
Lokpobiri emphasized that Nigeria is a mature field attracting significant investor interest due to its hydrocarbon potential. He reiterated that post-bid adjustments are not provided for, urging investors to adhere strictly to the bidding guidelines. "Nigeria is a mature field. That’s why investors want to invest in the country’s hydrocarbon," he added.
The government's tough stance reflects a determination to maximize the country's oil and gas resources and prevent the locking up of assets by inactive license holders. This development follows growing concerns about the underutilization of awarded oil blocks and the impact on Nigeria's overall oil production. Market watchers believe this move will encourage serious investors and lead to increased exploration and production activities in the long run.