The Federal Government has issued a stern warning to oil block owners, threatening to revoke licences if they fail to develop their allocated assets. This move aligns with Nigeria’s ambitious target of achieving a daily oil production of 2.06 million barrels by 2025, a goal that remains critical for the nation’s economic stability and energy security.

Speaking on Tuesday, Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, made it clear that the government will no longer tolerate idle assets. He emphasized the administration’s commitment to enforcing the \"drill or drop\" provisions enshrined in the Petroleum Industry Act (PIA). This provision is designed to ensure that oil blocks are either actively developed or reassigned to more capable investors who are willing to extract value from them.

As of February 2025, Nigeria’s oil production stood at 1.67 million barrels per day, according to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The gap between current production levels and the government’s target underscores the urgency of maximizing resource utilization.

Addressing stakeholders at a Cross Industry Group meeting in Florence, Italy—an event organized by International Oil Companies (IOCs) operating in Nigeria—Lokpobiri criticized the prolonged underutilization of oil blocks. He highlighted that several assets have remained dormant for decades, adding no value to their owners, the economy, or the country’s energy sector.

\"We cannot continue to have assets sitting idle for 20 to 30 years. If you\'re not developing them, we will reallocate them to those willing to invest,\" Lokpobiri asserted. His statement signals the government’s determination to reallocate oil resources to investors capable of fast-tracking production and boosting output.

To accelerate development, the minister urged operators to explore farm-out agreements and collaborative resource-sharing for contiguous assets. These strategies, he explained, would help maximize production efficiency while reducing operational costs. Farm-out agreements, a common practice in the oil and gas industry, allow major leaseholders to transfer part of their rights to smaller investors who are more equipped to undertake drilling and production activities.

Beyond domestic operators, Lokpobiri called on international oil companies to increase their investments in Nigeria’s energy sector. He reassured stakeholders that the administration of President Bola Ahmed Tinubu has introduced key incentives to create an investor-friendly environment. These incentives, he noted, are designed to streamline operations, ensure regulatory stability, and enhance profitability for both local and foreign oil firms.

This renewed push to enforce oil block utilization follows years of declining investments in Nigeria’s oil and gas industry. Security concerns, regulatory uncertainties, and global shifts toward renewable energy have dampened enthusiasm among investors. However, with global oil demand still significant and Nigeria’s vast reserves remaining largely untapped, the government is eager to reposition the country as an attractive destination for energy investments.

The warning to oil block owners also aligns with the government’s broader economic strategy to boost revenue generation from crude oil exports. With fluctuating global oil prices and increasing competition from other energy-producing nations, Nigeria must optimize its oil production to maintain relevance in the global market.

Industry experts have lauded the government’s resolve to implement the \"use it or lose it\" policy, describing it as a necessary step to revitalize the sector. Analysts argue that underdeveloped oil blocks represent lost economic opportunities, and unlocking these assets could significantly contribute to job creation, local content development, and foreign exchange earnings.

Nevertheless, some stakeholders have expressed concerns about the practical implementation of the policy. They highlight the need for a transparent and fair reallocation process to prevent legal disputes and ensure that only serious investors gain access to oil blocks. Others have called for additional measures to address security challenges, especially in the Niger Delta, where oil theft and vandalism continue to disrupt production.

Despite these challenges, the government remains steadfast in its position. With the 2025 production target looming, authorities are intensifying efforts to hold license holders accountable. The NUPRC has been tasked with closely monitoring compliance, and non-performing oil blocks could soon be up for reallocation.

As Nigeria charts its path toward energy security and economic prosperity, the message to oil investors is clear: develop your assets or risk losing them. The coming months will reveal how seriously stakeholders take this directive, but one thing is certain—Nigeria’s oil sector is poised for a shake-up, and only the most committed players will remain in the game.