What is driving 143 firms into Nigeria’s oil-block race?

Nigeria’s latest oil licensing round has entered its final competitive stage, with 143 local and international companies bidding for 50 oil and gas blocks.

The Nigerian Upstream Petroleum Regulatory Commission is holding the commercial bid conference in Abuja on Tuesday as it seeks investors capable of financing exploration and moving idle assets into production.

The high level of interest allows Nigeria to attract fresh capital into an upstream sector weakened by years of underinvestment, production losses and delayed projects.

However, the real test will come after the awards. Successful bidders must raise funding, complete exploration and bring commercially viable discoveries into production.

143 companies submit 200 bids

The licensing process initially attracted applications from 286 companies.

NUPRC prequalified 196 firms to proceed to the technical and commercial stages. Of that number, 143 companies submitted 200 bids for the available assets.

Only companies that passed the earlier screening and technical evaluation stages received invitations to attend the commercial bid conference at the Transcorp Hilton Hotel in Abuja.

The number of bids exceeds the available blocks, creating competition among applicants for some of Nigeria’s most promising petroleum assets.

The commercial conference represents the final competitive stage before ministerial approval and contract execution.

Niger Delta holds most available blocks

The 50 assets cut across seven petroleum-producing and frontier areas.

The offer includes 16 onshore blocks in the Niger Delta, 18 shallow-water blocks, and one deep-offshore block.

Three onshore assets sit in the Benin Basin, while the Anambra Basin, Chad Basin and Benue Trough each account for four blocks.

The mix gives investors access to established producing areas and less-developed frontier basins.

Niger Delta assets may attract companies seeking areas with existing infrastructure and proven hydrocarbon potential.

The inland basins offer longer-term opportunities but carry greater exploration, infrastructure, and security risks.

How NUPRC will select the winners

NUPRC will not choose successful companies solely based on the amount they offer as a signature bonus.

The regulator will combine technical and commercial scores when evaluating bids.

It will assess each applicant’s proposed signature bonus, work programme and commitment to provide performance security.

The work programme shows how quickly a bidder plans to explore and develop the asset. Performance security helps protect the government when an operator fails to meet its investment commitments.

The government set signature bonuses within a range of $3 million to $7 million per block to lower entry barriers and place more weight on technical capacity, financial strength, and development plans.

Bids outside the approved range may be rejected. Tied bids may require another sealed bidding process.

This approach could help Nigeria avoid awarding assets to companies that can pay large upfront fees but lack the capacity to finance exploration and production.

Licensing round targets $10bn investment

Nigeria launched the 2025 licensing round to attract about $10 billion in upstream investment.

NUPRC estimates that the assets could add as much as two billion barrels of oil over 10 years and contribute about 400,000 barrels per day when fully developed.

Those projections remain long-term estimates rather than guaranteed production.

Oil blocks often require years of seismic studies, exploration drilling, appraisal, financing, and field development before they produce commercial volumes.

NUPRC has acknowledged that awarding a licence does not immediately translate into additional barrels.

The speed of development will depend on the quality of the winning companies, access to capital, security conditions, and the regulator’s ability to enforce agreed work programs.

Nigeria seeks to revive upstream investment

Nigeria has struggled to attract sufficient oil and gas investment in recent years as operators faced regulatory uncertainty, crude theft, pipeline disruptions, and delayed project approvals.

Some international oil companies have also reduced their exposure to onshore assets while shifting investment towards deepwater projects and other markets.

The Petroleum Industry Act of 2021 introduced new fiscal and regulatory rules aimed at improving investor confidence and clarifying the responsibilities of industry institutions.

NUPRC says the current licensing round follows the law and uses a transparent, merit-based process to select companies with strong technical and financial credentials.

Investor interest in the latest round suggests that companies still see commercial opportunities in Nigeria’s petroleum sector.

But attracting bidders is only the first step. The country must ensure that new licence holders develop the assets rather than hold them without significant investment.

Why this matters

The licensing round could increase Nigeria’s crude production, government revenue, and foreign exchange earnings if the winning companies move quickly from awards to production.

New exploration could also expand the country’s reserves and create demand for drilling, engineering, logistics, and other oilfield services.

Gas discoveries may support power generation, fertilizer production, petrochemicals, and industrial expansion.

The process also offers Nigeria an opportunity to test whether reforms introduced by the Petroleum Industry Act can deliver transparent awards and attract credible investors.

However, past licensing rounds have not always produced the expected results. Some companies secured assets but struggled to raise capital or meet development timelines.

Nigeria will gain little from the current exercise if successful bidders pay signature bonuses and leave the blocks idle.

The government must therefore publish the winners, disclose key obligations, and enforce clear deadlines for exploration and development.

Awards will move to contracting stage

Successful bidders are expected to receive petroleum prospecting licenses after securing ministerial approval and completing the required contracts.

Formal contracting is expected to run between July and October 2026.

Awardees may operate under concession agreements or production-sharing contracts, depending on the structure of the asset and the fiscal terms they select.

The outcome of the commercial bid conference will show which companies have secured the assets.

The more important measure will come later: how many winners commit capital, begin drilling and produce new oil and gas within their agreed timelines.