Sees 4 million bpd production in 10 years
Emmanuel Addeh in Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) may begin conducting oil licensing rounds twice yearly as part of strategies to accelerate investment, bring new operators into the sector and substantially increase Nigeria’s crude oil production, the commission’s Chief Executive, Mrs Oritsemeyiwa Eyesan, has said.
Eyesan, who spoke in an interview with S&P Global, said the regulator was seeking to establish a predictable and faster licensing cycle, with successive bid rounds, at the minimum, taking new assets to the market annually.
“These will be annual, if possible, even twice-annual events. At a minimum, we’ll be going to the market on an annual basis,” Eyesan said, adding that future licensing processes could be completed within six to seven months.
The move marks a significant departure from Nigeria’s previous licensing regime, under which the country could go between five and 10 years without a bid round before the enactment of the Petroleum Industry Act (PIA) in 2021.
Since then, the scale and frequency of licensing exercises have increased, with seven blocks offered during the 2022/2023 mini bid round, 19 blocks put up for auction in 2024 and 50 assets offered in the 2025 licensing round.
The most recent exercise, which covered assets in the Niger Delta as well as the Benin, Anambra and Chad Basins, resulted in the award of 37 of the 50 licences offered, S&P recalled.
Eyesan said the assets awarded were expected to contribute about 300,000 bpd of additional production within their first three years, with the commission targeting between 300,000 bpd and 600,000 bpd from successive licensing rounds.
Officials, she disclosed, were already preparing for the next round, expected to commence by early October, with the exercise likely to include the 13 blocks that were not awarded during the last licensing process.
The forthcoming round is expected to feature assets in deepwater and shallow-water areas, as well as potentially frontier onshore basins.
However, Eyesan said the commission would adopt a more rigorous approach in selecting the assets to be offered, insisting that only commercially viable blocks should be brought to the market.
“I knew we were going to have a problem with some of the blocks,” she said, acknowledging that the regulator had “taken a gamble” by including some assets in the previous licensing round before they were sufficiently ready.
Eyesan said the commission was also determined to encourage a new generation of indigenous operators, particularly following the withdrawal of several international oil companies from Nigeria’s onshore and shallow-water assets.
“For this round, we were very mindful that the target audience was not overtly going to be the major players in the industry,” she said, pointing to indigenous companies such as Renaissance and First E&P as examples of emerging local operators.
To discourage companies from holding on to undeveloped assets, the NUPRC, she stressed , has also introduced stricter “drill-or-drop” provisions.
Under the 2025 licensing round, shallow-water licences were issued for three years, subject to extension, while deepwater and frontier concessions were granted for five years.
The commission is simultaneously pursuing increased investment in Nigeria’s offshore petroleum resources, with Eyesan saying the regulator was targeting between $30 billion and $50 billion in fresh investments across 22 deepwater projects by 2030.
She said the investment drive would be supported by recently introduced fiscal incentives and renewed investor interest in West Africa. Eyesan also outlined plans to reform Nigeria’s Domestic Crude Supply Obligation (DCSO) framework as the country expands its refining capacity.
She said the NUPRC was considering a compliance trading platform that would allow producers supplying more crude than their domestic obligations require to trade compliance certificates with companies that were more focused on exports.
The proposal is expected to provide greater flexibility in implementing the domestic crude supply framework while supporting the federal government’s ambition of ensuring adequate feedstock for local refineries.
Nigeria’s refining landscape has changed significantly since the commencement of operations at the Dangote refinery, which currently has a processing capacity of about 700,000 bpd.
Eyesan said, however, that local refiners should continue to make commercial decisions about their crude purchases and should not be compelled to buy domestic grades where more competitive alternatives were available.
“I would not begrudge Dangote if (it’s)not picking up domestic crude,” she said. “It might not be prudent to procure those grades as opposed to cheaper alternatives,” she explained.
Despite Nigeria’s long struggle to significantly increase crude production, Eyesan expressed confidence that sustained investment, regular licensing rounds and improved asset development could fundamentally change the country’s production outlook.
Nigeria has struggled to exceed 2 million bpd in the past decade amid ageing infrastructure, underinvestment, crude theft and operational challenges.
But Eyesan said the country’s resource base and planned investments could support a far more ambitious production trajectory over the longer term. “I think Nigeria has a potential very easily to get to 4 million barrels in another 8-10 years,” she said.