Nigeria to Revoke Idle Oil Field Licenses, Issues Ultimatum to Underperforming Firms

The Nigerian government has declared its intention to revoke the licenses of oil companies holding dormant oil fields and has issued a stern ultimatum to underperforming firms. This move is part of a broader strategy to revitalize the nation's declining oil output and maximize value from its hydrocarbon resources.

Speaking at the 2025 Nigerian Oil and Gas Conference (NOG) in Abuja, Senator Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), emphasized that the government will no longer tolerate companies "sitting on critical national resources" without

delivering results. He asserted that licenses should not be used merely as leverage to access capital for unrelated ventures.

President Bola Tinubu has reportedly directed the Nigerian National Petroleum Company Limited (NNPC Ltd) Board to comprehensively review all existing operatorship arrangements in the sector. This signals a decisive shift in policy against companies failing to contribute to national oil production targets.

Minister Lokpobiri expressed frustration over Nigeria's continued struggle to meet its OPEC production quota, despite the reforms introduced through the Petroleum Industry Act (PIA) and other initiatives. He highlighted that oil production is currently lower than before the PIA was signed, urging operators to "either deliver results or make way for those who can."

The government's "drill or drop" policy, which mandates operators to commence production within a specified timeframe or relinquish their licenses, is set to be rigorously enforced. This is aimed at ensuring optimal utilization of assets and boosting government revenue.

Beyond revoking idle licenses, the government is also looking into reforming Engineering, Procurement, and Construction (EPC) activities to strengthen compliance with the Local Content Act, criticizing the practice of "briefcase contractors" who subcontract jobs. EPC firms are being urged to increase their physical presence and reinvest in Nigeria.

This decisive action underscores Nigeria's commitment to boosting its oil production, which is crucial for the nation's economic recovery and development goals. The government is seeking to attract serious investors who can demonstrate commitment through performance, not just promises.