Nigeria appears set for another decisive round of oil field development, coming just a year after a successful bid cycle that delivered new oil wells and expanded the nation’s crude oil production capacity. Signalling a shift toward structured and predictable upstream governance, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently announced that licensing rounds will henceforth be a yearly affair, a deliberate strategy by the Gbenga Komolafe-led management to deepen investor confidence and encourage long-term capital commitments in the upstream sector. The 2025 licensing round is emerging as one of the most strategically significant bid rounds since the enactment of the Petroleum Industry Act (PIA) 2021.
Set to formally open on 1 December, the 2025 bid round aims to prioritise natural gas alongside crude oil as part of Nigeria’s commitment to Sustainable Development Goals (SDGs). The focus of the exercise is on discovered and undeveloped fields, especially fallow assets. The narrative emphasis is on transparency, regulatory stability, investor confidence and the development of both oil and gas resources to increase production capacity. Two main reasons drive the focus of the 2025 bid round: optimising Nigeria’s existing hydrocarbon resources rather than just exploring new opportunities and supporting energy transition and domestic energy needs.
At the centre of the upcoming round is the commitment to operationalising the PIA’s ‘drill or drop’ provision, which requires operators to develop awarded discoveries within a set timeframe or relinquish them to the State. In line with this, the Commission embarked on recovering idle assets, which it has prepared for reallocation. The recovered and under-utilised assets, complemented by newly delineated blocks, collectively form the drawing pool for the proposed 2025 bid round. Estimates from industry sources suggest that about 24 blocks, combining newly identified acreage and recovered fallow assets, may be included, spanning onshore, shallow-water and deep offshore terrains. This policy, strengthened under Section 94 of the 2021 Act, aims to activate and free up fallow assets, encouraging new investments by ensuring unproductive blocks are either developed or returned.
Section 94(4) of the PIA requires the holder of a marginal field (or discovery) to present a field development plan within three years. Section 94(4)(b) gives the operator the option, with NUPRC’s consent, to farm-out the discovery (bring in a partner), subject to conditions which include presenting a development plan. Section 94(5) defines the timeframe for submitting the development plan. Sections 94(6), (7) and (8) deal with failure to comply if no valid development plan is submitted, or other conditions are not met. Operators either develop the field (drill) or relinquish their rights (drop) if they remain inactive beyond the set period.
The fully digitised 2024 bid round earned strong industry praise for its transparency and efficiency. Building on that, the 2025 round is set to enhance the process through a real-time, non-discriminatory digital system that enables applicants to track their status at every stage. The bid framework follows a rigorous multi-tiered structure: first, a pre-qualification stage that assesses technical capacity, financial stability and legal compliance; second, an open technical evaluation for all qualified applicants, with no restrictions on block selections; and finally, a commercial bid stage conducted on an encrypted digital platform and livestreamed for transparency. These steps ensure that only competent bidders advance, reflecting the same standards established in the 2024 round and mandated by the PIA and regulatory guidelines.
The procedure marks a significant change from past experiences, following the upstream regulator’s initiatives under the PIA. Hitherto, bid rounds were plagued by opacity, trailed by protests and assailed by petitions. It came once in a long while in staccato patterns, but the current posture is fashioned to provide regulatory stability and boost investment confidence. It aligns with the PIA, which is part of a broader strategy to attract more upstream investments and increase production. The entire process is tailored to drive infrastructure development, increase productions levels and enhance economic gains for shared prosperity.
Although the Commission has indicated that a formal list of blocks and guidelines will be released before the portal opens on 1 December, public data, especially the June 2025 NUPRC Concession Situation Report, offers strong indications of which blocks are likely to be offered and the types of companies expected to participate. Based on the report, several Oil Mining Licenses (OMLs) and Petroleum Prospecting Licenses (PPLs) align closely with the regulator’s priority criteria. Among these are OML 24, OML 29, OML 33, OML 40, OML 42, OML 49, OML 53 and OML 67, along with associated PPLs. These assets represent areas of discovery that have remained underdeveloped or where previous awardees did not effectively commercialise.
Most of these blocks are located in the onshore and shallow-water Niger Delta, an area known for challenging operating conditions and inconsistent commercial activity, which has led to many stalled developments. Also likely are blocks in the continental shelf and deep offshore zones, where technical discoveries exist but remain under-utilised due to capital constraints or stalled development plans. The inclusion of both mature and frontier terrains aligns with NUPRC’s goal to diversify the opportunity set and stimulate production from assets with shorter development cycles.
Alongside the identification of block candidates, the landscape of likely bid participants has become clearer. Expected bidders fall into three broad groups: international majors and large independents, Nigerian upstream independents and new entrants or consortiums with technical or financial backing.
Among the international oil companies (IOCs), TotalEnergies has expressed strong interest in the bid round. The company has repeatedly commended the upstream regulator for its transparent and digitized licensing process, aligning with its deepwater and gas strategy in Nigeria. Other oil majors, such as Shell, Eni and Chevron, have a history of participating in Nigerian bid rounds and remain engaged in the upstream sector. However, their participation in 2025 will likely depend on whether the block offerings align with their evolving strategic focus, which increasingly prioritises gas, high-margin deepwater assets and de-risked developments over greenfield exploration.
The second prominent group comprises Nigerian and regional private operators, who have often played a pivotal role in driving the development of marginal and medium-sized fields. Companies such as Seplat Energy, Ardova, First E&P and Famfa Oil are strong potential bidders, given their existing portfolios and history of acquiring and developing assets relinquished by the oil majors. The Concession Situation Report also lists numerous smaller indigenous companies operating PPLs and marginal field assets. These firms may seek to expand their footprints or bid through joint ventures with technical and financial partners. For many of these indigenous players, the attraction lies in the availability of discovered resources with shorter development horizons, which aligns with their operating models and capital access patterns.
The third category includes new entrants and service-company-backed consortiums, typically structured to leverage a combination of technical expertise and financial capacity. In previous licensing rounds, such consortiums have partnered with Engineering, Procurement and Construction (EPC) contractors, Floating Production, Storage and Offloading (FPSO) providers and energy-focused investment funds. This pattern is likely to continue, especially because NUPRC has made rapid development a central objective. Bidders who can demonstrate credible field development plans, integration with midstream infrastructure and access to FPSOs, modular production units and early-production facilities are likely to have a competitive edge.
Investor confidence appears to have surged due to positive signals from the regulator and the Federal Government. There are indications that the 2025 round will adhere strictly to the PIA, with complete digitization of the bid process, transparent evaluation criteria and stable regulatory conditions. Political support, combined with the promise of annual licensing rounds, helps create predictability, which is crucial for both domestic and international investors assessing long-term commitments.
To achieve improved infrastructure development and support a rise in production, certain conditions must be considered. There is a need for more FPSO units and other infrastructure, a factor the industry regulator has underscored at every point, highlighting a commitment to not just exploration but also the development of near-production assets. The NUPRC has recognised funding challenges and is collaborating with relevant stakeholders to address these financing issues and improve production capacity. Recently, financial institutions, including global investment banks, have shown interest in supporting upstream transactions, given Nigeria’s renewed push to increase production. The 2025 round promotes collaboration between investors and financial institutions to address financing challenges. It is so designed under the Petroleum Industry Act framework and it benefits from political support, including promises from legislative committees to maintain sector stability and investor confidence.
Akpandem James, a Fellow of the Nigerian Guild of Editors, lives in Abuja.
