The Federal Government has confirmed that more than 50 expired oil licences will not be renewed, as holders have failed to make the required investments since their award during the 2020 marginal field bid round.
Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, disclosed this during the PENGASSAN Energy and Labour Summit in Abuja, stressing that the licences currently seeking extensions will remain revoked in line with the Petroleum Industry Act (PIA).
Few Investors, Many Idle Licences
Lokpobiri explained that over 60 marginal licences were granted a few years ago, but fewer than six operators have invested meaningfully in their assets. He argued that allowing extensions without tangible work would undermine the sector’s growth.
“If each of the 60 licence holders had produced even 2,000 barrels daily, that would add up to 120,000 bpd. But records before me show that less than six have made the necessary investments. The PIA says you either drill or drop. Why should we keep licences with people who lack the capacity to use them?” he asked.
The minister added that Nigeria urgently needs to maximize output from every available well to meet both domestic and international obligations.
‘Extensions Impoverish Licence Holders’
Rejecting calls for renewal, Lokpobiri maintained that continued extensions only worsen the plight of the companies involved.
“Renewing these licences is like impoverishing the holders. They spend scarce resources attending conferences, parading as investors, without real capacity. It is better to decline and reallocate them to those with proven technical and financial ability,” he said.
He noted that reallocating inactive licences would help raise production volumes and strengthen domestic supply obligations under the PIA.
Domestic Supply Tensions
The minister also highlighted ongoing disputes between producers and refiners over the domestic crude oil supply obligation, noting that producers prefer higher export prices while refiners demand lower local pricing.
“I often intervene between refiners and producers. The PIA provides for willing buyer–willing seller, but refiners need crude at lower rates while producers cite pre-existing commitments. The only lasting solution is to increase volumes, and that is why we cannot keep idle licences in the wrong hands,” Lokpobiri stressed.
NUPRC’s Position on Expired Licences
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had earlier confirmed that over 40 Petroleum Prospecting Licences (PPLs) awarded on June 28, 2022, expired in June 2025. These were issued after the 2020 marginal fields bid round, which saw 57 fields offered to investors.
The NUPRC clarified that licence extensions are optional for three to five years, depending on performance. Many operators have applied to convert their PPLs into Petroleum Mining Leases (PMLs), but approvals remain subject to fulfilling minimum work and financial obligations.
NUPRC Chief Executive Gbenga Komolafe said the expired licences were at varying stages of exploration, appraisal, and pre-development. He noted that several applicants had submitted documents for extension, including:
- $5,000 application fee
- Proof of meeting minimum financial commitments
- Evidence of submitting a work performance guarantee backed by a CBN-licensed commercial bank with a minimum “BBB” credit rating.
Expert Views
Energy economist Professor Emeritus Wumi Iledare observed that renewals are unlikely unless operators demonstrate genuine exploration or development progress. “Where no significant activity has taken place, extension becomes increasingly difficult,” he explained.
Lokpobiri’s Warning
The minister’s latest stance reinforces warnings he issued last year against licence hoarding.
“Out of about 60 marginal bid beneficiaries, only about five have started production. Licences are for three years and renewable once, provided the work plan is followed. Some holders treat licences as souvenirs. That era is over,” he declared.