The revocation of inactive oil licenses in Nigeria reflects a strong desire to rationalize and boost the oil sector, by maximizing the exploitation of resources and strengthening national energy sovereignty.

A strict policy to revive the oil sector

Nigerian authorities, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), have decided to rigorously enforce the “use it or lose it” policy. This measure requires license holders to commence production within a specified timeframe or relinquish their exploitation rights. The goal is to revive oil activities, optimize the use of existing assets, and increase the country’s public revenues.

Contexte and Stakes of the measures

More than 60% of exploration licenses granted to local and international companies have expired without actual operations starting. This situation hampers the growth of Nigeria’s oil sector, which is already facing the departure of several multinationals and a decline in crude production. The government, led by the Minister of State for Petroleum Resources, Senator Heineken Lokpobiri, is committed to enforcing this policy without exception, reclaiming unused wells to assign them to more dynamic operators.

Towards Strengthened Energy sovereignty

The NUPRC has also highlighted ongoing reforms, including the automation of licensing and permitting procedures aimed at reducing administrative burdens and improving operational efficiency in the sector. Furthermore, the transfer of oil assets from multinationals to local operators has been praised as a major step toward enhanced energy sovereignty for Nigeria. This transition opens new expansion opportunities for national companies.

A Dynamic Revival of the Oil sector

These measures are part of broader reforms initiated since President Bola Tinubu took office in 2023. He has placed the overhaul of the energy sector at the core of his economic strategy, notably through the implementation of the Petroleum Industry Act (PIA) and the removal of gasoline subsidies. These reforms are beginning to yield results with renewed investor interest, increased investments, and gradual improvements in production and refining capacity.