By Akpandem James
Nigeria is set for another decisive round of oil field development, coming just a year after a successful bid cycle that attracted new investors,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 petroleum sector.
The 2025 oil 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 December 1, the 2025 bid round aims to prioritise natural gas development, alongside crude oil as part of Nigeria’s commitment to achieving the Sustainable Development Goals (SDGs).
The focus of the exercise is on discovered and undeveloped oil 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 the nation’s 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 towards 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 for allocation to other willing and ready to extract value from the asset.
In line with this provision, the Commission embarked on recovering idle assets, which it has prepared for reallocation.
The recovered and under-utilised assets, complemented by newly delineated oil blocks, collectively form the drawing pool for the proposed 2025 oil bid round.
Estimates from industry sources suggest that about 24 oil blocks, combining newly identified acreages and recovered fallow assets, may be included in the basket of oil blocks, spanning onshore, shallow-water and deep offshore terrains.
This policy, strengthened under Section 94 of the PIA 2021, aims at activating and freeing up fallow assets, encouraging new investments by ensuring unproductive blocks are either developed or returned into the basket.
Section 94(4) of the PIA requires the holder of a marginal field (or discovery) to submit a field development plan within three years, while Section 94(4)(b) gives the operator the option, with NUPRC’s consent, to farm-out the discovery, by bringing in a partner to take over the operatorship of the asset, subject to conditions approved by the regulatory authority, which include presenting a development plan.
Also, Section 94(5) defines the timeframe for submitting the development plan, while 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 digitized 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 of the bid process.
The bid framework follows a rigorous multi-tiered structure: first, a pre-qualification stage that assesses technical capacity of the prospective bidder, financial stability and legal compliance; second, an open technical evaluation for all prequalified applicants, with no restrictions on block selections; and finally, a commercial bid stage conducted on an encrypted digital platform and streamed live for transparency.
These steps ensure that only competent bidders with the requisite capacity and capabilities 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 petroleum industry 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 oil blocks and guidelines will be released before the bid portal opens on December 1, public data, especially the June 2025 NUPRC Concession Situation Report, offers strong indications of which oil blocks are likely to be offered and the types of companies expected to participate in the bid exercise.
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 oil blocks are located in the onshore and shallow-water regions of the Niger Delta, an area known for challenging operating conditions and inconsistent commercial activity, which has led to many stalled field developments.
Also likely are oil 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 oil block candidates, the landscape of likely bid participants has become clearer.
Expected bidders fall into three broad groups: international oil majors and large independents, Nigerian upstream independents and new entrants or consortia with technical or financial backing.
Among the international oil companies (IOCs) that already expressed strong interest in participating in the bid include TotalEnergies.
The company has repeatedly commended the upstream regulator for its transparent and digitized licensing process, aligning with its deep water and gas strategy in Nigeria.
Other oil majors, such as Shell Petroleum Development Company of Nigeria, Eni and Chevron Nigeria Limited, 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 oil block offerings align with their evolving strategic focus, which increasingly prioritises natural gas development, high-margin deep water 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 oil 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 consortia, typically structured to leverage a combination of technical expertise and financial capacity.
In previous licensing rounds, such consortia 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 provisions of 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.
However, 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 PIA framework and it benefits from political support, including promises from legislative committees to maintain sector stability and investor confidence.
Mr.James, a Fellow of the Nigerian Guild of Editors, lives in Abuja.
