…To Boost Oil Production
A report by Arise News reveals that the Nigerian government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), is set to enforce the ‘drill or drop’ clause enshrined in the Petroleum Industry Act (PIA) 2021. This directive mandates oil operators to commence production within three years or forfeit their fields to the government.
As part of its strategy, the NUPRC recently organized a stakeholder engagement to deliberate on Section 94 of the PIA, which governs the operational framework for marginal fields. This section emphasizes that oil operators must present a viable field development plan within the stipulated timeline or face relinquishment of the fields.
According to the Act, operators who fail to meet the development plan requirements will have their marginal fields farmed out, with conditions regulated by the Commission. The regulation aims to ensure that oil resources are optimally utilized and prevent stagnation in the development of allocated fields.
This move underscores the government’s commitment to increasing crude oil production and addressing challenges in the upstream sector. The NUPRC highlighted that this policy is part of broader reforms to improve the efficiency and accountability of Nigeria’s oil and gas industry.
With global demand for energy resources fluctuating, the enforcement of this policy is expected to attract serious investors and stimulate economic growth. By ensuring compliance with the ‘drill or drop’ provision, the government hopes to unlock the potential of undeveloped fields and boost revenues from the oil sector.
SOURCE: progblog