Lokpobiri says oil licenses should be treated as status symbols, urges value creation for Nigerian economy
NUPRC seeks technically, commercially competent operators – Engr. Oritsemeyiwa, Authority Chief Executive
Oredola Adeola
The Federal Government has reaffirmed its commitment to awarding the 50 oil and gas blocks on offer in the 2025 Oil Licensing Round, only to credible operators and strictly enforcing the “drill-or-drop” principle as provided under the Petroleum Industry Act (PIA).
Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), and Engr. Oritsemeyiwa Eyesan, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), issued this caution to prospective investors and stakeholders at the Licensing Round Pre-bid Conference in Lagos.
Senator Lokpobiri in his keynote addressed at the event warned that oil and gas assets on offer in the 2025 Licensing Round must not be treated as status symbols by individuals seeking to parade oil licences without adding value to the Nigerian economy.
The Minister said lessons from the 2020 bid round and his experience over more than two years in office revealed that some operators had held licences for over 20 years without developing them, while “proudly going round the world with licence suitcases” that added no value to their lives or to Nigeria.
According to the Minister “oil and gas licences belong to the Federal Government of Nigeria and are granted for a defined timeframe, not owned automatically by awardees.
“Many licence holders spent years searching for investors who never came. They do no realise that serious investors are only attracted by clear parameters, credible capacity, and regulatory certainty.
“From the beginning, the 2025 licensing round should not be seen in that old light. That era is gone,” the Minister said.
He further stated that several assets in previous rounds were acquired for speculative purposes by bidders who lacked the technical and financial capacity to develop them, hoping instead to trade the licences for fortune.
Lokpobiri insisted that the current bid round is firmly anchored on the Petroleum Industry Act (PIA), in strict compliance with Sections 73 and 74, stressing that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has so far complied with all extant provisions of the law.
Reflecting on challenges from the 2020 bid round, the Minister noted that government was inundated with representations from bidders seeking refunds of registration fees or claiming that awarded assets were not true representations of what had been advertised.
“How is that my business?” he said, recalling his response to such complaints.
“There were several assets on offer; you conducted your own due diligence, picked them, bid and won. I was not in the market when you bid—it was your choice.”
The Minister further emphasized that the PIA does not provide for asset exchanges or refunds, stressing that once a bid is completed and an award is made in accordance with the law, both commercial and technical risks lie entirely with the bidder, with no obligation on government to offer refunds.
He explained that this was why the pre-bid conference is fundamental, as it provides prospective bidders the opportunity to fully understand the available data, applicable laws, and risks associated with the assets on offer.
Lokpobiri also declared that the era of discretionary awards was over, urging participants to approach the process with diligence and clarity.
He advised bidders to form consortia where necessary, especially where technical expertise and financial capacity are required.
The Minister further expressed concern over complaints from bidders unable to pay signature bonuses, noting that some resorted to third parties paying on their behalf, except where bidding was done transparently through recognised consortium arrangements.
Lokpobiri therefore assured participants that the NUPRC would ensure that the best and most credible bidders emerge successful in the 2025 Oil Licensing Round.
Engr. Oritsemeyiwa in her presentation stated that the 2025 licensing round is a key dividend of the Petroleum Industry Act (PIA), noting that most of the assets on offer are recovered as fallow fields under the provisions of the PIA.
She said, “We urge prospective bidders to participate with credible companies and proper representation, because where you do not, you make it difficult for us to progress. We will pull you out of the system if you are not credible.
“Based on feedback from prior bid rounds, the Authority is seeking technically competent operators to manage and develop these assets. We have defined the technical and commercial considerations required for final award.”
Chief Executive of the NUPRC added that the historically high cost of entry, had been prohibitive to investors, and that the President Bola Tinubu has given the approval adjustments to the signature bonuses.
She also noted that the Authority has tweaked a number of fees that bidders are expected to pay prior to first oil.
“Today, with the tax regime aligned to ongoing reforms, the industry is better positioned to achieve government objectives of growth, expansion, and economic sustainability,” she said.
The Authority CE highlighted that the sector has seen a rise in Final Investment Decisions (FIDs) driven by attractive gas incentives and added that these factors are expected to be taken into account in the 2025 licensing round bidding process.
She emphasized that Nigeria should be seen as a preferred investment destination, adding that the oil and gas industry is increasingly demonstrating this in practice.
She added that the number of indigenous companies that are now producers has increased significantly, which thus highlighted the need for the development of service companies to operate together as an ecosystem.
Engr. Oritsemeyiwa further stressed that banks are critical to the survival of the oil and gas industry, and there is a need by stakeholders to change the narrative to enable the banking sector to effectively support industry growth.
