Nigeria Plans Fresh Oil Licensing Round As 25 Companies Win 2024 Blocks
Oil Regulator Tightens Rules with New 'Drill or Drop' Policy
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced plans for a 2025 oil licensing round Wednesday, while simultaneously releasing winners of the 2024 bid round that saw 25 companies secure petroleum blocks across the country.
NUPRC Chief Executive Gbenga Komolafe, speaking at the 2024 Licensing Round Commercial Bid Conference in Lagos, revealed that the upcoming 2025 round will target underexplored assets and fallow fields, with a special focus on natural gas development to support Nigeria’s climate commitments.
The announcement comes with the activation of the ‘Drill or Drop’ clause from the Petroleum Industry Act (PIA) 2021, which mandates oil operators to begin production within three years or surrender their licenses. This marks a significant shift in Nigeria’s approach to resource management.
“The 2025 exercise will focus on discovered and undeveloped fields, fallow assets, and prioritize natural gas development to support Nigeria’s commitment to the UN Sustainable Development Goals,” Komolafe said.
Winners of the 2024 round include major industry players Sifax and Royalgate consortium, Oceangate Engineering oil and gas, MRS oil and gas, Sahara Deepwater resources, and TotalEnergies. The transparent digital bidding process, witnessed by the Nigeria Extractive Industries Transparency Initiative (NEITI), saw 25 companies securing blocks out of 31 offered.
The NUPRC chief highlighted Nigeria’s substantial hydrocarbon reserves, citing 209 trillion cubic feet of natural gas and over 37 billion barrels of oil. Despite global shifts toward renewable energy, industry projections suggest fossil fuels will remain dominant in the global energy mix through 2050.
“Rising investments in clean energy technologies and infrastructure has pushed overall energy investment above USD 3 trillion for the first time in 2024,” Komolafe noted. “However, OPEC, the IEA, and other energy outlooks indicate that fossil fuel will continue to dominate the global energy mix.”
The commission’s plan includes making licensing rounds an annual event to address production decline and increasing global competition. This approach aims to boost investor confidence while adhering to PIA provisions.
The regulator has already begun recovering idle assets under the ‘drill or drop’ provision. “We have been engaging with the industry to ensure that unexplored areas and resources are returned to production,” Komolafe explained. “We intend to revitalize these idle assets, as many of them remain unused, which is not the intent of the Petroleum Industry Act.”
These initiatives is in line with Nigeria’s broader strategy to maintain its position in the global energy market while addressing domestic energy security concerns. The NUPRC emphasizes that despite global energy transition trends, Nigeria must strategically position itself to meet both local and international energy demands through its vast hydrocarbon resources.
