Onome Amuge
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), says it is working to revive investor interest in the upstream sector by reducing entry costs, strengthening enforcement of licence obligations.
To this end, the oil regulator began formal engagement with potential bidders ahead of its 2025 oil licensing round, in which 50 oil and gas blocks are being offered to the market. At a pre-bid conference in Lagos this week, regulators set out revised commercial terms, regulatory expectations and a clearer timetable for approvals, in what officials described as a reset for Africa’s largest oil producer.
A key element of the strategy is a significant reduction in signature bonuses and other pre-production fees, which investors have long criticised as barriers to entry. Oritsemeyiwa Eyesan, chief executive of the NUPRC, said the revised fee structure is intended to align with current market conditions and incentivise the rapid development of assets rather than speculative licence holding.
“The cost of getting into the sector has historically been too high. That has changed. What we want are serious operators who can develop assets quickly and responsibly,” she told investors.
The reforms have been enabled by the Petroleum Industry Act (PIA), Nigeria’s landmark oil sector legislation enacted in 2021 after years of delay. Under the law, regulators have greater powers to reclaim undeveloped or idle assets and reassign them through competitive processes. Many of the blocks on offer in the 2025 round are so-called fallow fields that were repossessed from previous holders who failed to meet development obligations.
Government officials used the Lagos meeting to underline that licences would no longer be treated as long-term options rather than production commitments. Heineken Lokpobiri, minister of state for petroleum resources (oil), warned bidders that assets would be withdrawn if they were not developed within agreed timelines.
“These licences are not trophies. If you sit on them, they will be taken back,” he said.
The tougher tone reflects frustration within government over Nigeria’s persistent production shortfalls. Despite its resource base, the country has struggled to sustain output above 1.5 million barrels a day in recent years, well below both capacity and Opec quotas. Oil theft, ageing infrastructure and delayed investment have compounded the problem, weighing heavily on public finances and foreign exchange earnings.
Lawmakers have also tied the licensing round to more inclusive fiscal and economic objectives. Eteng Williams, chairman of the Senate committee on upstream petroleum, said legislative support would be maintained to ensure Nigeria achieves its ambition of adding one million barrels a day to output over the medium term. “This is not the time to play games,” he told participants.
Beyond licensing terms, the regulator is pitching a wider overhaul of how the upstream sector is governed. In a separate presentation to industry stakeholders earlier this month, Eyesan outlined a three-pillar strategy focused on production optimisation and revenue growth, faster and more predictable regulation, and stronger governance and safety standards.
The plan aligns with President Bola Tinubu’s economic agenda and sets ambitious production targets of two million barrels a day by 2027 and three million by 2030. Achieving those goals, however, will require more than new licences. Nigeria must also recover shut-in production, reduce losses from theft and operational failures, and shorten the time between licence award and first oil.
To address longstanding complaints about bureaucratic delays, the NUPRC says it will publish service-level agreements for key approvals, expand digital processing of permits and data submissions, and introduce a monthly leadership forum bringing together regulators and operators to resolve bottlenecks. The commission also plans to strengthen hydrocarbon accounting, tracking production more closely to limit losses and revenue leakages.
