Sopuruchi Onwuka

The Ministry of Petroleum Resources has charged companies seeking to participate in Nigeria’s upcoming oil and gas licensing round to present credible proposals and clear evidence of technical and financial capacity as a condition for participation.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said only qualified and credible investors would be considered in the 2025 bid round, declaring that the era of discretionary awards and speculative equity trading was over.

Lokpobiri spoke at a pre-bid conference attended by prospective bidders alongside the new Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Oritsemeyiwa Eyesan. The session was organised to brief participants on available data, applicable laws and the risks associated with the assets on offer.

The minister stressed that the licensing process would be transparent and strictly rules-based, unlike previous rounds, particularly the 2020 bid round, which was plagued by disputes and complaints.

“The era when people acquired assets only for equity trading is gone,” Lokpobiri said, noting that several licences awarded in the past were held by bidders who lacked the technical or financial capacity to develop them.

He said the government was inundated after the 2020 round with requests for refunds of registration fees and complaints that awarded assets did not match advertised expectations. Lokpobiri made it clear that the Petroleum Industry Act (PIA) does not provide for asset swaps or refunds once bids are concluded.

“Once an award is made in accordance with the law, both commercial and technical risks lie entirely with the bidder,” he said, adding that serious investors seek regulatory clarity, credible capacity and defined parameters.

Oracle Intelligence reports that about 50 oil blocks are on offer in the 2025 licensing round, with assets to be awarded strictly under the “drill-or-drop” principle provided in the PIA.

Lokpobiri said the bid round is being conducted in line with Sections 73 and 74 of the PIA and is designed to deliver immediate and sustainable value to the national economy. He warned that the practice of holding licences for decades without developing assets would no longer be tolerated.

“The essence of this bid round is to attract credible investors who can generate value within a defined timeframe,” he said.

He encouraged bidders to form transparent consortia where necessary to meet technical and financial requirements and cautioned against situations where signature bonuses are paid by undisclosed third parties.

Lokpobiri assured participants that the NUPRC would ensure that only the most credible bidders emerge successful.

In her presentation, NUPRC Chief Executive Engr. Oritsemeyiwa Eyesan said the 2025 licensing round is a key outcome of the PIA, noting that many of the assets on offer were recovered as fallow fields under the Act.

“We urge prospective bidders to come with credible companies and proper representation,” she said. “Where that is not the case, it makes progress difficult, and we will remove such bidders from the process.”

Eyesan said the commission is seeking technically competent operators based on feedback from previous bid rounds and that both technical and commercial criteria have been clearly defined for final awards.

She disclosed that President Bola Tinubu has approved adjustments to signature bonuses to address historically high entry costs that had discouraged investors. The NUPRC has also reviewed several fees payable before first oil.

“With the tax regime aligned to ongoing reforms, the industry is better positioned to meet government objectives of growth, expansion and economic sustainability,” she said.

Eyesan added that the sector has recorded an increase in Final Investment Decisions, driven largely by gas-focused incentives, and that these developments would be reflected in the 2025 bid round.

She said Nigeria should increasingly be viewed as a preferred investment destination, pointing to the growing number of indigenous producers and the need to strengthen service companies as part of a broader industry ecosystem.

She also stressed the critical role of banks in supporting the oil and gas sector, calling on stakeholders to help change perceptions to enable stronger financial sector participation.