Judul : Stakeholders Optimistic as NUPRC Readies 2025 Oil Block Allocation
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Stakeholders Optimistic as NUPRC Readies 2025 Oil Block Allocation
The oil and gas industry's upstream segment is experiencing significant anticipation following the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declaring the start of the 2025 Licensing Round, which will begin on December 1, 2025.
The head of the National Petroleum Regulatory Commission (NUPRC), Engineer Gbenga Komolafe, disclosed this information during the NUPRC's Project 1MMBOPD Additional Production Investment Forum held in London on Tuesday, November 11, 2025.
Komolafe mentioned that the statement aligned with the Petroleum Industry Act, after President Bola Ahmed Tinubu, who also serves as the Minister of Petroleum Resources, gave his approval.
'We are announcing that we are prepared, after the Minister of Petroleum Resources has approved it in accordance with the Petroleum Industry Act, to start the 2025 licensing round beginning on December 1, 2025,' the CCE stated.
At a gathering that included CEOs from oil companies, banking officials, and potential investors, the head of NUPRC stated that financial support continued to be the main obstacle in Nigeria's upstream industry, and the commission, as a facilitator, intends to address this by bringing relevant stakeholders together.
He mentioned that current crude production stands at 1.71 million barrels per day, with a maximum daily output reaching 1.83 million barrels, indicating clear advancement.
The CCE stated that 46 Field Development Plans (FDPs) have been approved from January 2025 up to now, indicating immediate investment pledges and potential for increased production.
Komolafe pointed out that the number of rigs had increased to more than 60, with at least 40 currently operational. He therefore suggested that this is the ideal moment for current investors to increase their investment in Nigeria.
Why licensing round
The NUPRC licensing round is a competitive procedure in which the regulatory body provides companies with the opportunity to explore oil blocks. This process has been structured, under the terms of the Petroleum Industry Act (PIA), as an open and clear method for allocating oil blocks.
This has replaced the previous practice of granting oil prospecting licenses (OPL) or oil mining licenses to government allies without carrying out a transparent process to identify the recipients.
Effort to boost oil output
Producing approximately 1.7 million barrels of oil daily, the federal government is significantly below its goal of boosting income from oil production.
President Bola Ahmed Tinubu, in the 2025 budget unveiled in 2024, anticipated oil production of 2.5 million barrels per day. However, just weeks away from 2025, Nigeria has not reached 2 million barrels per day, with current output remaining between 1.7 million and 1.8 million barrels per day.
Experts note that with numerous oil reserves yet to be explored, Nigeria requires reliable oil companies to receive exploration licenses.
As per the NUPRC, more than 3.5 billion barrels of oil and condensate resources are trapped in underdeveloped fields located in various basins throughout Nigeria.
This is why the licensing process is seen as important to recognize reliable companies and investors for the development of the areas.
In the 2024 bidding procedure, 25 firms were identified as top contenders following the licensing phase.
TotalEnergies Exploration and Production Company, MRS Oil and Gas Limited, Sahara Deepwater Resources Limited, along with 20 other entities, were selected following the competitive bidding process organized by the NUPRC.
Thirty-one oil blocks were put up for auction, with 25 being bid on as the remaining six were returned to the pool, stated the Commission Chief Executive, NUPRC, Engr. Gbenga Komolafe.
The CE mentioned that the 2024 licensing process includes 24 thoughtfully chosen areas covering onshore, shallow water, and deep offshore regions.
Alongside these are the seven deepwater offshore blocks from the 2022 Mini Bid Round, increasing the total to thirty-one (31) blocks.
He characterized Nigeria as the only victor in the bidding procedure, stating that the process was carried out according to international standard procedures.
"This is the finest in the country's history, where we were able to carry out a licensing process in a highly open way. We have established benchmarks that we will keep enhancing," he stated.
He stated that the 2025 licensing round will concentrate on overlooked resources, unused areas, and the development of natural gas, as part of Nigeria's dedication to the UN Sustainable Development Goals.
Komolafe stated that the NUPRC plans to hold licensing rounds every year to tackle issues like reduced output and increasing international competition.
The blocks for the 2025 bidding cycle will be obtained from an inactive assets recovery initiative called 'drill or drop,' which the commission has initiated in accordance with the Petroleum Industry Act (PIA).
Komolafe stated, "Lower production rates and rising global competition require strategic measures. Fortunately, the Petroleum Industry Act has provided us with a special chance to revamp the sector, draw in investments, and establish Nigeria as a leading force."
Experts optimistic about the 2025 procedure
A sector representative, Otunba Adetunji Oyebanji, shared in a conversation with our reporter his confidence in higher oil output following the choice of reputable firms.
"I expect that if the right individuals come into power, this will ultimately lead to higher output in Nigeria in the near term, which will benefit the economy. The main thing is selecting the correct people," he stated.
In an interview with Daily Trust, a well-known professor of Petroleum Economics, Prof. Wumi Iledare, pointed out that the ongoing use of the term 'oil block' is somewhat contradictory to the Petroleum Industry Act (PIA) 2021.
He stated that the PIA has intentionally moved away from the approach of the previous Petroleum Act (PA) 1969.
What the law acknowledges today are 'petroleum prospecting licenses' and 'petroleum mining leases' granted via an open and competitive procedure—rather than the conventional, politically influenced concept of 'oil blocks.'
He mentioned that the PIA prioritizes transparency, accountability, and fairness in the early stages of petroleum management. He noted that the licensing round is just the initial step among six phases in the upstream sector, and it is considered the most significant as it influences investor trust and the handling of natural resources.
"What I anticipate, therefore, is a licensing process that demonstrates: Firm compliance with the PIA, particularly Sections 3, 4, 69-76, and 83-84 regarding transparency and competitive bidding. Transparent, consistent standards for eligibility, assessment, and selection. Strong data disclosure, ensuring that bidders are not placed at a disadvantage due to unequal information.
Consistency with Nigeria's energy security and growth of reserves objectives, rather than political factors.
He mentioned that the commission holds a significant responsibility, which is why competitive bidding continues to be better than arbitrary awards as it supports fair market value, investor fairness, and industry trust.
Nevertheless, competitive rounds carry certain risks—particularly the winner's curse, in which a bidder pays too much for an opportunity based on optimism rather than factual analysis. To reduce this risk, I recommend the commission perform thorough pre-bid valuation assessments to ensure that bidding does not result in overly high expectations that could hinder project implementation.
Utilize the concept of leftover monetary value to determine if a successful bid makes commercial sense, and to prevent scenarios where overestimation results in default or asset inactivity.
Enhance the verification of bidders' financial, technical, and operational capabilities.
He also called on the commission to release evaluation reports, at a minimum in a summarized version, to strengthen transparency and public confidence, while maintaining the process free from political influence, in line with the intent and wording of the PIA.
He continued by urging the focus on assets that have well-defined geological information, to minimize ambiguity and improve the quality of bids.
He mentioned that the credibility of the licensing round will influence Nigeria's reserve growth direction and investment prospects for years ahead.
If the Commission implements it strictly according to the governance framework of the PIA, Nigeria will not only draw in high-quality investors but also demonstrate that the time of secrecy and arbitrary decisions has genuinely passed.
From his side, Prof. Dayo Ayoade, an expert in Energy Law at the University of Lagos, mentioned that there was a licensing process conducted between 2023 and 2024. He emphasized that the key aspect of this licensing is its regularity, which enables investors to gain access to oil blocks and maintain enthusiasm within the global oil and gas industry.
Now, the NUPRC's most recent licensing round, as reported by NEITI, was conducted in a fair and transparent way. I believe the only area for improvement is where they could broaden the range of observers, perhaps. They need to have reasonable observers, not just any random individuals. If the number of observers can be increased, that would be very beneficial, ensuring that those providing comments are not solely government or semi-government bodies.
He mentioned that the criteria for oil licensing regarding the disclosure of bids and the method of evaluating and assessing them are all clearly defined.
The practice and the issue is that Nigerian agencies do not adhere to the rules, so as long as the rules are followed, it's acceptable. A few licensing rounds ago, I understand that the regulator essentially grouped together people who did not bid with each other, creating artificial partnerships. Therefore, we need to avoid such situations and similar ones.
Provided by SyndiGate Media Inc. (Syndigate.info).Demikianlah Artikel Stakeholders Optimistic as NUPRC Readies 2025 Oil Block Allocation
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