FG begins mass revocation of idle oil blocks next week

The Federal Government will commence a mass revocation of idle oil blocks next week, as the Nigerian Upstream Petroleum Regulatory Commission aims to recover assets from operators who have failed to begin development within the specified timelines. NUPRC Chief Executive, Oritsemeyiwa Eyesan, announced this at a two-day workshop for licence holders in Lagos.

The commission has issued a directive to recover blocks from license holders who have not undertaken activities within the stipulated periods, warning that operators who have held assets without making progress would no longer be allowed to retain them indefinitely. Eyesan emphasized that some operators have expressed doubt about the government's threats, but she firmly stated that the process will commence by the end of the month.

The commission's directive applies to license holders who have failed to meet the three-year timeline for onshore assets and the five-year timeline for offshore assets. Eyesan explained that the move is intended to address the recurring issue in the upstream petroleum sector where operators secure licences but fail to progress to exploration, development, and production.

She highlighted that some successful bidders assembled technical teams for the licensing process but abandoned them after acquiring the assets, leading to a lack of expertise in developing the blocks. Eyesan warned that the inability to secure partners or financing would not be considered a valid reason for extending the time allowed for asset development, stating that an extension is not automatic.

She urged new license holders to avoid previous operators' mistakes and ensure they possess the necessary technical, financial, and managerial capacity to manage their assets. Eyesan noted that owning an oil asset requires more than meeting financial obligations, emphasizing the need for specialized knowledge and proper corporate structures.