Drill or drop, FG set to compell IOCs to optimise oil wells

The federal government has announced plans to begin enforcing the ‘drill-or-drop’ provisions of the Petroleum Industry Act (PIA), compelling international oil companies (IOCs) to either commence production on inactive oil wells or relinquish them.

Minister of State for Petroleum Resources, Heineken Lokpobiri, disclosed this during the Cross Industry Group (CIG) meeting in Florence, Italy, on Tuesday.

He emphasized that reviving inactive wells aligns with the government’s commitment to increasing crude oil production and ensuring national energy security.

“The federal government, under President Bola Tinubu’s leadership, has provided every necessary incentive to ensure IOCs in Nigeria operate smoothly and profitably,” Lokpobiri stated.

“Now, it is imperative for industry players to match these efforts with increased investment by announcing final investment decisions (FIDs).”

He acknowledged concerns raised by IOCs regarding engineering, procurement, and construction (EPC) contractors but stressed that EPCs would only engage if they see strong commitments from the industry.

“The government has done its part to create an investment-friendly environment. The ball is now in the court of IOCs and other operators to make strategic investment decisions that will drive increased production and sustainability in the sector,” he added.

Lokpobiri further urged industry players to explore collaborative measures, such as sharing resources for contiguous assets and releasing underutilized assets to operators willing to invest in production.