The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, is considering annual and biannual oil licensing rounds as part of efforts to attract new investors, revive inactive assets and increase crude oil production.
The Chief Executive of NUPRC, Oritsemeyiwa Eyesan, disclosed this in an interview with S&P Global, saying the commission intended to make more oil assets available to the market and encourage operators to develop concessions that had remained inactive.
Eyesan said the commission hoped to conduct licensing rounds at least once every year, with the possibility of holding two rounds annually where necessary.
“These will be annual, if possible, even twice-annual events,” she said. “At a minimum, we’ll be going to the market on an annual basis with a six- or seven-month turnaround time on future iterations.”
According to her, the commission also plans to establish a faster and more regular licensing process to improve investor access to Nigeria’s upstream petroleum opportunities.
Fresh investment expected to boost output
The planned licensing rounds are intended to support Nigeria’s efforts to reverse declining production and attract new activity into the oil and gas sector.
Eyesan said the latest licensing round, which covered assets in the Niger Delta, Benin Basin, Anambra Basin and Chad Basin, was expected to contribute approximately 300,000 barrels per day of additional crude oil production within the first three years.
She added that successive licensing rounds could generate between 300,000 and 600,000 barrels per day in additional production.
The regulator’s strategy is based on the expectation that new entrants, improved asset management and stricter development obligations will help unlock production from marginal, abandoned or underdeveloped concessions.
Nigeria’s crude oil output has been affected by ageing infrastructure, underinvestment, oil theft, pipeline vandalism, operational disruptions and delays in developing new fields.
Regular licensing rounds could help address some of these challenges by introducing new operators with fresh capital, technology and technical expertise.
“Drill-or-drop” policy
Eyesan also pointed to the importance of enforcing “drill-or-drop” principles, under which companies that fail to develop their allocated assets may be required to relinquish them.
The policy is designed to discourage the prolonged holding of oil blocks without meaningful exploration or development activity.
Under such an approach, investors would be expected to meet agreed work commitments within specified timelines. Assets that remain undeveloped could subsequently be returned to the government for reassignment.
The NUPRC believes the policy could improve the utilisation of Nigeria’s petroleum resources and reduce the number of dormant concessions.
However, the success of the licensing strategy will depend on the commission’s ability to provide regulatory certainty, ensure transparent bidding processes and address longstanding concerns around contract sanctity and investment security.
Investment climate remains critical
While the planned bid rounds could create opportunities for investors, industry participants are likely to assess the commercial viability of the assets, fiscal terms, security conditions and availability of infrastructure before committing capital.
The development of new oil fields typically requires significant upfront investment and may take several years before production begins.
Investors will therefore need confidence that the regulatory framework will remain stable throughout the life of their projects.
The Petroleum Industry Act introduced a new framework for regulating Nigeria’s upstream sector, with the NUPRC responsible for promoting exploration and production while ensuring compliance with applicable laws and regulations.
The commission’s proposed licensing schedule is expected to form part of a broader effort to make Nigeria’s upstream sector more competitive.
For Nigeria, increased crude production could improve government revenue, strengthen foreign exchange inflows and support economic activity across the oil-producing regions.
However, analysts have consistently stressed that higher production must be accompanied by improved transparency, stronger environmental safeguards and greater benefits for host communities.
The NUPRC’s proposed annual or biannual licensing rounds therefore represent an opportunity to attract investment, but their impact will ultimately depend on how effectively awarded assets are developed and brought into production.
