• NUPRC bets on independents for industry’s future

The Federal Government is stepping up efforts to revive activity across Nigeria’s oil-producing provinces through a sustained programme of oilfield licensing and development, as the country targets crude production of three million barrels per day by 2030.

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) plans to make new and dormant acreage available to investors through annual, and potentially twice-yearly, licensing rounds as it seeks to attract fresh capital, technology and operators into the upstream sector.

NUPRC Chief Executive Officer, Oritsemeyiwa Eyesan, said the regulator intended to maintain a minimum of one licensing round every year, with future processes expected to be completed within six to seven months.

“These will be annual, if possible, even twice-annual events. At a minimum, we’ll be going to the market on an annual basis,” Eyesan said.

The strategy is designed to reverse years of declining investment and production caused by maturing fields, underinvestment, insecurity and prolonged delays in licensing new acreage.

Nigeria has been producing around 1.5 million barrels per day of crude recently, while output has not exceeded two million barrels per day for the past 12 years, according to OPEC+ data cited by S&P Global Energy.

Eyesan, who became NUPRC chief executive during the 2025 licensing round, said the regulator would use regular auctions and stricter development obligations to stimulate activity on both new and abandoned concessions.

The approach marks a significant acceleration from the period before the Petroleum Industry Act (PIA) 2021, when Nigeria could go five to 10 years without conducting a licensing round.

Since the PIA came into effect, licensing exercises have increased in frequency and scope. The 2022/23 mini bid round involved seven oil blocks, followed by 19 blocks in 2024 and 50 blocks in 2025.

Of the 50 blocks offered in the latest round, 37 licences were awarded in July, covering acreage across the Niger Delta, Benin, Anambra and Chad Basins.

The successful concessions are expected to contribute about 300,000 barrels per day of additional crude production within their first three years of development. Eyesan said successive licensing rounds could generate between 300,000 and 600,000 barrels per day of additional output.

The next licensing round is expected to commence by early October, with the 13 unlicensed blocks from the 2025 round returning to the pool alongside new acreage.

According to Eyesan, the new offering will cover deepwater, shallow-water and potentially frontier onshore basins.

The forthcoming exercise will also be the first licensing round that Eyesan oversees from beginning to end, with the regulator promising to place greater emphasis on the commercial viability of assets offered to investors.

“I knew we were going to have a problem with some of the blocks,” she said, acknowledging that the commission had “taken a gamble” by including some assets in the previous licensing pool before they were sufficiently de-risked.

A major component of the new strategy is attracting new operators to Nigeria’s onshore and shallow-water provinces, following the exit or divestment of several international oil companies, including Shell, ExxonMobil, TotalEnergies and Eni, from parts of the country’s mature onshore operations.

Eyesan said the latest licensing round was deliberately structured to appeal to smaller and newer operators rather than relying primarily on international oil majors.

She cited indigenous and emerging operators such as Renaissance and First E&P as examples of companies demonstrating the potential of new players to revive production from Nigerian assets.

The NUPRC is also tightening development obligations through new “drill-or-drop” provisions designed to discourage passive ownership of oil acreage.

Under the terms of the 2025 bid round, shallow-water licences were awarded for three years, with an option for extension, while deepwater and frontier concessions were granted for five years.

At the same time, the regulator is seeking to attract major international investment into Nigeria’s deepwater sector, where companies such as Shell, Eni and ExxonMobil continue to pursue major projects.

The latest bid round attracted Chevron to PPL 2010, the sole deepwater asset in the offering that drew interest from a major international oil company.

Eyesan said the NUPRC was targeting between $30 billion and $50 billion in new investment in 22 deepwater projects by 2030, supported by new tax incentives and improving investor sentiment towards West Africa.

She said geopolitical developments had also influenced the way investors assess their exposure to the region.

“I think it’s enhanced the way the investors analyse and look at their presence in West Africa,” she said.

Beyond increasing production and attracting investment, the upstream revival is also being driven by the need to guarantee adequate crude feedstock for Nigeria’s expanding domestic refining industry.

The emergence of the 700,000-barrel-per-day Dangote refinery has created a major domestic market for Nigerian crude, while the Federal Government is seeking to expand local refining and reduce dependence on imported petroleum products.

At present, Dangote Refinery sources a significant proportion of its crude domestically, but the company has raised concerns over crude availability and terminal reliability. The challenge could become more significant when the refinery completes its planned expansion.

Eyesan supports the ambition of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to have Nigerian crude increasingly directed towards domestic refineries by 2030, arguing that stronger integration between upstream production and domestic refining would benefit the wider petroleum value chain.

Nigeria’s Domestic Crude Supply Obligation already requires producers to supply specified volumes to domestic refiners. However, producers can in practice seek more attractive commercial opportunities in export markets.

To improve compliance and flexibility, the NUPRC plans to introduce a trading platform that would enable producers exceeding their domestic supply obligations to trade compliance certificates with producers focused on exports.

Eyesan, however, acknowledged that domestic refineries must remain commercially competitive, saying Dangote should retain the flexibility to determine its crude slate based on economics.

“I would not begrudge Dangote if [it’s] not picking up domestic crude,” she said. “It might not be prudent to procure those grades as opposed to cheaper alternatives.”

The regulator believes that increased upstream investment, new field developments and improved operating conditions could ultimately generate a substantial crude surplus for Nigeria.

Eyesan said Nigeria could potentially raise production to as much as four million barrels per day within the next eight to 10 years if the country succeeds in sustaining investment and developing its available resources.

The planned licensing cycle therefore represents a broader attempt to reconnect Nigeria’s upstream industry with the rest of the petroleum value chain—reviving exploration and field development, attracting fresh investment, raising crude production and ensuring sufficient feedstock for the country’s emerging refining capacity.