TheCable

Heineken Lokpobiri, minister for petroleum resources (oil), says only five out of 60 licences issued during the 2021 marginal oil field bid round are currently producing. 

Lokpobiri spoke at an event organised by The Petroleum Club in Lagos, on Monday.

He said the federal government is looking to increase crude oil output to boost revenue and would not tolerate dormant oil licences.

“I don’t need to know you to renew or sign your licence and I will also not look at your face for me to cancel it,” he said.

“Out of those who benefited from the last marginal bid round, out of about 60, maybe only about five have started producing. 

“Their licences will expire sometime this year because it is for three years, and renewable for another three years.”

He said the condition of retaining licences is “that you have a work plan”.

If licensees do not follow their work plan, he said the ministry has the authority to revoke the licences.

“If somebody has the marginal oil licence and can’t raise funding, you’re just impoverishing him,” Lokpobiri added.

He said the government would no longer allow companies or individuals to hold onto licences as souvenirs.

‘The ‘big boys’ are holding on to these licences as souvenirs, they are not doing anything about them. That is why we are farming them out. We will not allow any company to do that. Let’s start to do things differently,” he said.

“The worst thing that will happen to Nigeria is for our refinery to be fully rehabilitated and we will have to import crude from another country. That’s why I’m here to engage you that together, let’s change this story.

“In solving the funding challenges, pull your resources together, go into partnerships, so that you can fund the investments in this sector.”

‘NIGERIA LOST N30BN TO LOW OIL PRODUCTION IN PAST TWO AND HALF YEARS’

The minister said Nigeria has lost about $30 billion to low oil production over the past two and half years. 

“For the past two and a half years, oil has been hovering around $80 per barrel. 480,000bpd, multiplying it by two and a half years will give you about $34bn. When I was on the table, I was doing rough mathematics,” he said.

”If one asset was doing about 600,000 barrels; but because of the problems which we are trying to resolve, production declined to 120,000 barrels, which means we’ve lost about 480,000bpd. 

“Multiply it by $80, every day you get about $240m; multiply it by two and half years; we are talking of over $30bn. Inject that into our economy today, the dollar will naturally drop. This exchange rate is a matter of demand and supply.”

One of the reasons why the country’s production is low, he said, is because we have “too many shut wells, some of them contiguous to our marginal fields or oil wells”. 

“But by the time we take those wells in line with the law and give you people, and we give a timeline upon which you must produce, we will be able to increase production,” the minister said.

Lokpobiri said President Bola Tinubu has given him the directive to guarantee Nigeria increases output through investments and increased income.