Market News

…Eyes 300,000 bpd from latest auction

…Winners face 90-day clock

Nigeria handed out 37 oil and gas blocks to 31 companies on Tuesday, capping a licensing round that regulators say marked the first time frontier basins far from the country’s traditional Niger Delta heartland drew serious investor appetite.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said 143 firms lodged 200 bids for the blocks on offer in Abuja, though only 37 of the 50 available assets attracted any bids at all.

The remaining 13 will go back to the drawing board for further technical work before returning to market, according to the commission.

The bulk of the winning blocks sit in familiar territory with 16 in the Niger Delta onshore and 18 in the shallow water, plus a single deep-offshore block.

But the round’s headline was the interest shown in acreage the industry has long treated as unproven: three blocks in the Benin Basin, four in the Anambra Basin, four in the Chad Basin and four in the Benue Trough.

“This is the first time in Nigeria’s energy history that frontier basins would attract such level of investor interest,” the commission said in a statement.

Among the winners are SSonic Petroleum, Dutchford E&P, Attabanson Global Company, Rosem Energy, Pivot-GIS, Network E&P, Asharami, LexOil, Gupsco Energy, Concept-Reel Petroleum Services, Clinton Oil Field, Blackrock Holdings and Highban Resources, along with more than a dozen other companies that picked up single or multiple blocks across the terrains on offer.

Conditional awards

None of the allocations is final yet, as Oritsemeyiwa Eyesan, chief executive of NUPRC, said winners will only receive their formal awards once they pay the applicable signature bonus and secure sign-off from the Minister of Petroleum Resources, as required under the Petroleum Industry Act of 2021.

Eyesan said each winning bidder must satisfy post-bid conditions, including guarantees, the signature bonus, first-year rent and execution of contractual documents, within 90 days of receiving an offer letter, or forfeit the asset entirely. Companies that miss the deadline will see their blocks passed to reserve bidders in order of ranking.

“The government is not seeking speculative holders of acreage; it is seeking partners with the capacity, discipline and commitment to deliver measurable production and economic value,” Eyesan said.

She added that the commission would also hold firms to a “drill or drop” standard once assets are handed over, meaning companies that sit on undeveloped licenses risk losing them.

Regulators framed the 13 blocks that drew no bids as a reflection of their frontier status rather than a setback.

“Frontier means that they have not yet been de-risked, and so we were not surprised when we saw that some of these assets returned with no bidders,” Eyesan said, adding that the commission would carry out further studies before relisting them.

Reserves and output targets

The commission estimates the awarded acreage could add roughly 500 million barrels to Nigeria’s reserves, which currently stand at 37.01 billion barrels of crude and condensate alongside 215.19 trillion cubic feet of gas.

Eyesan said the blocks are expected to contribute a minimum of 300,000 barrels per day of crude and condensate production within three years of development, a contribution she called central to Nigeria’s push to reach 3 million barrels a day of output by 2030.

“These projections represent more than additional barrels; they represent increased government revenue, improved foreign-exchange earnings, greater utilisation of infrastructure, opportunities for indigenous service companies, employment creation, technology transfer and broader economic growth,” she said.

Ekperikpe Ekpo, minister of state for petroleum resources (gas), said the round underscores Nigeria’s push under its “Decade of Gas” initiative, with new upstream investment expected to expand domestic gas supply and support industrialisation.

Heineken Lokpobiri, minister of state for petroleum (oil), argued the assets are especially valuable now given the standoff between Iran and the U.S., which he said has elevated the strategic worth of Nigeria’s position along the Gulf of Guinea.

He also welcomed the fact that the Petroleum Industry Act stripped ministers of discretionary powers to hand out blocks directly, saying the licenses awarded should function as working assets rather than trophies.