The federal government has urged International Oil Companies (IOCs) in Nigeria to increase investments in the oil and gas sector, highlighting the country’s investment-friendly fiscal policies and incentivised investment opportunities.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, made the call at the Cross Industry Group (CIG) meeting held in Florence, Italy, organised by IOCs operating in Nigeria.

The meeting focused on challenges, expectations, and strategies to enhance the sector’s contributions to domestic energy needs and regional expansion across Sub-Saharan Africa.

Mr Lokpobiri, in a statement by his Special Adviser on Media and Communication, Nneamaka Okafor, emphasised that the President Bola Tinubu administration had provided necessary incentives to ensure seamless and profitable operations.

Speaking at the event, Mr Lokpobiri explained that while IOCs had identified engineering, procurement, and construction (EPC) contractors as a challenge, EPCs would only commit when they observed strong investment decisions from industry players.

“The government has done its part by providing the requisite and investment-friendly fiscal policies, including the President’s Executive Order incentivising deep water investments. Now, the ball is in the court of the IOCs and other operators to make strategic investment decisions that will drive increased production and sustainability in the sector,” the minister said.

He emphasised the need for IOCs to support local refining efforts, noting that more refineries were coming online and would require a steady supply of crude oil.

According to the minister, ramping up production would enable Nigeria to meet both local and international obligations.

In line with the federal government’s drive to boost production, Mr Lokpobiri reiterated that it would begin implementing the “drill or drop” provisions of the Petroleum Industry Act (PIA) where necessary.

He said, “We cannot continue to have assets sitting idle for 20 to 30 years without development. If you are not utilising an asset and it remains underdeveloped for decades, it neither adds value to your books.

“Nor does it add value to us as a country. We encourage industry players to explore collaborative measures such as shared resources for contiguous assets, farm-outs, and the release of underutilised assets to operators ready to invest in production. Otherwise, like any responsible government, we will take back these assets and allocate them to those willing to go to work.’’

The minister also urged operators to consider farm-out agreements for assets close to existing infrastructure rather than incurring high costs on new floating production storage and offloading (FPSO) units.

The Chairman of the Oil Producers Trade Section (OPTS), Osagie Osunbor, commended the minister on his direct engagement with industry players and for the federal government’s continued efforts in advancing the sector.

“We appreciate the government’s commitment to creating a conducive environment for investment. The minister’s engagement has provided critical insights and has also challenged us as industry players to step up efforts to increase production,” Mr Osunbor stated.

The federal government remains committed to ensuring a thriving oil and gas industry and expects operators to match its commitment by making tangible investment decisions that will drive growth, sustainability, and national energy security.

(NAN)