Nigeria has moved to lower the cost of entering its upstream oil sector as regulators met prospective bidders for 50 oil and gas blocks offered in the 2025 Oil Licensing Round, signalling a tougher stance on dormant assets and a renewed push for investment.
At a pre-bid conference in Lagos on Wednesday, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it had reduced entry costs, including revisions to the Signature Bonus and other fees payable before first oil, following investor feedback from earlier licensing rounds.
The meeting brought together government officials, oil producers, independent operators, and emerging players, underscoring the scale of interest in Nigeria’s upstream sector.
Petroleum Industry Act Reshapes Oil Licensing
NUPRC Chief Executive Oritsemeyiwa Eyesan said reforms driven by the Petroleum Industry Act (PIA) were beginning to reshape how oil assets are allocated and managed.
“With the advent of the PIA, if you do not work your block, it will be taken from you,” Eyesan said, adding that many of the assets now on offer were previously held as fallow fields.
She said lessons from past rounds had informed the current process, with regulators prioritising technically capable operators over speculative bidders.
Lower Barriers to Attract Upstream Investment
Eyesan said high entry costs had previously discouraged investors, prompting a policy shift approved by President Bola Ahmed Tinubu.
“In addition to the revised signature bonus, the commission has also adjusted several charges payable by bidders before first oil,” she said, describing the changes as part of a broader effort to boost Upstream Investment without increasing transaction burdens.
She added that gas-focused incentives were beginning to yield results, with several Final Investment Decisions already reached.
Government Warns Against Asset Hoarding
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, warned that oil blocks should not be treated as status symbols.
“We give you licensing to operate within a given time frame, and it doesn’t belong to you,” he said, noting that some assets had remained undeveloped for more than 20 years.
Lokpobiri said the licensing round complied fully with Section 73 of the PIA, which sets conditions for granting licenses, adding that the law does not allow refunds of bidding fees or signature bonuses.
Production Targets and Regulatory Overhaul
Separately, Eyesan unveiled a three-pillar agenda focused on production optimisation, regulatory predictability, and sustainable operations, aligned with government targets of two million barrels per day by 2027 and three million by 2030.
She said the commission would publish Service Level Agreements for approvals, launch a digital permitting workflow, and reduce time-to-first oil through structured engagement with operators.
“Our success will be measured by faster approvals, secure production, and disciplined acreage performance,” Eyesan said.
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