After Adding New Oil Wells to Reserves, FG Threatens to Revoke Licenses of Oil Firms

After Adding New Oil Wells to Reserves, FG Threatens to Revoke Licenses of Oil Firms

  • The Nigerian government has issued a warning to marginal oil field holders to begin exploration
  • The Minister of Petroleum Resources (Oil), Heineken Lokpobiri, said the government will revoke the licenses of unused oil wells
  • He stated the country is losing about $30 billion due to undeveloped oil wells, which people still hold onto’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian government says it has finalised plants to take over all idle and unused oil wells from operators who have yet to use them.

The government threatened to revoke all licenses given to individuals and firms that had yet to begin oil exploration.

Crude oil exploration, Seplat/ExxonMobil
FG moves to withdraw licenses of unused oil wells amid revenue loss Credit: Bloomberg/Contributor
Source: Getty Images

Nigeria loses $30 billion to unexplored oil wells

Heineken Lokpobiri, the Minister of Petroleum Resources (Oil), stated this on Monday, April 15, 2024, at an event in Lagos.

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Lokpobiri said Nigeria had lost about $30 billion due to low oil output in the last two years.

At the event, Austin Avuru, Chairman of the Petroleum Club, said Nigeria’s oil production is depleting. In contrast, the government gives conflicting figures from those provided by the Organisation of Petroleum Exporting Countries (OPEC).

Lokpobiri said Nigeria is losing about 480,000 barrels of crude oil daily due to the Seplat/ExxonMobil spat.

He said the asset produced about 600,000 barrels daily before the crisis began two years ago.

He stated that Nigeria was losing millions of dollars every day.

Seplat/ExxonMobil crisis costing Nigeria fortunes

Punch reports that Seplat and ExxonMobil announced a $1.6 billion sales agreement, under which Seplat would buy ExxonMobil’s total assets in the Nigerian National Petroleum Company Limited (NNPC).

The deal was reportedly halted via letter by Nigerian Upstream Petroleum Regulatory Commission (NUPRC) ExxonMobil.

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The commission said the deal could no longer hold because it had exercised its pre-exemption first refusal on the asset.

NNPCL also reportedly objected to selling ExxonMoobil’s assets to Seplat, insisted on exercising its first right of refusal, and later offered to acquire the assets for $1.6 billion.

Lokpobiri said:

“Oil has been hovering around $80 per barrel for two and a half years. 480,000bpd, multiplied by two and a half years, will give you about $34bn. I was doing rough mathematics when I was on the table.”

The minister said his target was to ensure that Nigeria ramps up production via investments and grow revenue, per the mandate by President Bola Tinubu.

FG announces addition of over one billion barrels of crude oil previously reported that the Nigerian Upstream Petroleum and Regulatory Commission (NUPRC) announced on Monday, April 15, 2024, that Nigeria’s hydrocarbon reserves have jumped by 1.087 billion barrels, and gas reserves have increased by about 2.57 trillion cubic feet.

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Nigeria now boasts about 37.5 billion crude oil reserves, with a total gas resource of 209.26 trillion cubic feet.

The chief executive of NUPRC, Gbenga Komolafe, announced this during an event and explained that the reserves' lives also stand at 68.01 years and 97.99 years for oil and gas, respectively.


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