FG Returns 13 Oil Blocks to Bid Basket, Enforces ‘Drill or Drop’ Policy

The Federal Government is returning 13 oil and gas blocks from the Nigeria 2025 Licensing Round to the bid basket, as the upstream regulator moves to ensure that petroleum assets are awarded only to operators capable of financing and rapidly developing them.

The Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Mrs Onitsemeyiwa Eyesan, disclosed this on Tuesday at the Commercial Bid Conference for the Nigeria 2025 Licensing Round in Abuja.

Eyesan said successful bidders would be required to fulfil all post-award conditions within 90 days and proceed promptly towards exploration and field development. Companies that fail to meet the conditions risk losing their awards, while assets left undeveloped will be recovered under the commission’s “drill or drop” policy.

The position signals a tougher approach to acreage administration after years in which some petroleum licences were held for extended periods without corresponding investment, drilling or production.

“Thirteen blocks have been withdrawn from the current exercise and will be returned to the bid basket for future licensing rounds,” Eyesan said.

Nearly 300 firms express interest

The 2025 Licensing Round attracted almost 300 expressions of interest, reflecting sustained investor appetite for Nigeria’s hydrocarbon resources despite global energy-transition pressures and the domestic operational challenges confronting upstream producers.

Of the 286 companies that applied for prequalification, 196 were cleared to proceed to the technical and commercial stage. A total of 143 companies eventually submitted 200 bids for 37 oil and gas assets.

The government initially offered 50 blocks across several geological terrains. They comprised 16 Niger Delta onshore blocks, 18 Niger Delta shallow-water blocks, one Niger Delta deep-offshore block, three Benin Basin onshore blocks, four Anambra Basin onshore blocks, four Chad Basin onshore blocks and four Benue Trough onshore blocks.

The withdrawal of 13 oil blocks leaves 37 assets covered by the submitted technical and commercial bids.

Eyesan said the commercial bid opening would determine the successful companies, but stressed that awards would not automatically go to bidders offering the highest financial payment.

Instead, the commission will prioritise credible operators with sufficient technical competence, financial strength and realistic development plans.

That distinction is critical. Large signature bonuses may provide immediate government revenue, but Nigeria’s greater economic interest lies in attracting companies capable of converting acreage into reserves, production, employment, taxes and foreign-exchange earnings.

Signature bonus carries 20 points

Dr Amba Egba, Deputy Director of Leases Administration, Exploration and Acreage Management at NUPRC, said the technical and commercial evaluation process had been fully automated to promote transparency, fairness and efficiency.

Bidders will be assessed on their proposed field development plans and other technical parameters.

The commercial evaluation assigns 20 points to the signature bonus, with offers ranging between $3 million and $7 million.

The scoring structure indicates that the regulator is attempting to balance immediate commercial value with the more important question of whether a bidder possesses the capacity to develop the asset.

Under the Petroleum Industry Act 2021, Nigeria has sought to move towards a more transparent, rules-based and commercially disciplined upstream market. The licensing round is part of that effort to attract investment, expand production and deepen Nigeria’s participation in the global energy economy.

The 2025 exercise was announced on November 11, 2025. Its electronic portal opened on December 1, while a pre-bid conference was held on January 14, 2026, at Eko Hotels and Suites in Lagos.

Prequalification registration closed on February 27, with the process concluded on March 16. From the 196 prequalified companies, 143 ultimately submitted bids for the commercial conference.

President approves 2026 round

Eyesan also disclosed that President Bola Tinubu had approved the commencement of the 2026 Licensing Round.

She encouraged companies that fail to secure oil blocks and other assets under the current process to participate in the next exercise.

Regular licensing rounds could improve predictability for investors by replacing irregular acreage awards with a more structured pipeline of opportunities. They could also reduce incentives for companies to retain dormant assets when alternative blocks are periodically brought to market.

However, policy continuity will remain essential. Investors assessing Nigerian petroleum opportunities will consider fiscal terms, security, access to infrastructure, community relations, regulatory predictability and the speed of government approvals.

Market and economic implications

The licensing round could unlock new investment in seismic services, drilling, engineering, logistics, marine support, fabrication and field-development infrastructure.

If the awarded assets progress rapidly, they could also contribute to Nigeria’s effort to raise crude oil and gas production, improve public revenue and strengthen foreign-exchange inflows.

The inclusion of frontier areas such as the Chad Basin, Benue Trough and Anambra Basin also reflects the government’s ambition to broaden exploration beyond the traditional Niger Delta.

Yet frontier acreage carries greater geological, infrastructure and security risks. Successful development will therefore require patient capital, reliable data and operators capable of managing longer investment cycles.

Investor relevance

For investors, the regulator’s emphasis on technical and financial capability is encouraging. It suggests that acreage will be treated as a productive national asset rather than a speculative licence to be traded or warehoused.

The 90-day post-award requirement should also accelerate clarity around which bidders can proceed.

But enforcement must be consistent. A “drill or drop” policy will build confidence only if it is applied transparently to all operators, including politically connected or long-established licence holders.

Brand implications

For NUPRC, the licensing round is a test of its brand as an independent, transparent and commercially focused regulator.

A credible process would improve Nigeria’s reputation among global and indigenous energy companies. Delays, opaque evaluations or inconsistent enforcement would weaken that confidence.

For successful bidders, the award will create expectations beyond ownership. Their reputations will depend on how quickly they mobilise investment, engage host communities and translate licences into functioning projects.

BRANDECONOMY Insight

Nigeria does not need more dormant oil blocks. It needs producing assets.

The decision to return 13 blocks to the bid basket and enforce the “drill or drop” policy reflects a necessary shift from licence allocation to development accountability.

Signature bonuses may generate short-term revenue, but drilling, production and domestic value creation offer far greater economic returns.

The real success of the 2025 Licensing Round will not be measured by the number of winning bidders announced. It will be measured by how many rigs move to the fields, how much new capital enters the sector and how quickly the awarded assets begin contributing to Nigeria’s energy security and economic growth.