The Federal Government has warned oil licence holders that it will no longer tolerate undeveloped wells and dormant assets, declaring an end to what it called speculative or “status-symbol” ownership of petroleum blocks.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, issued the warning at the 2025 Nigerian Upstream Petroleum Regulatory Commission (NUPRC) pre-bid conference in Lagos, which participants monitored virtually.
He told prospective bidders that the 2025 licensing round places full commercial and technical responsibility on investors and that the government will not grant refunds, asset swaps, or regulatory concessions for poorly assessed bids.
“Once a bid is completed and an award is made in accordance with the law, the risk lies entirely with the bidder,” Lokpobiri said. “Government has no obligation to refund bidding fees or signature bonuses because you later discovered that you did not find oil or that the asset is not what you expected.”
No Refunds, No Asset Swaps
Lokpobiri said his ministry continues to receive petitions from winners of previous bid rounds, particularly the 2020 licensing round, requesting refunds or alternative assets after failing to develop awarded fields.
He said some companies returned to the government, claiming the blocks they acquired were not commercially viable or did not match their expectations.
“The Petroleum Industry Act does not provide for asset exchanges or refunds on these grounds,” he said, urging bidders to conduct thorough due diligence before entering future rounds.
The minister also criticised long-term hoarding of oil licences without development.
“Some people have held licences for 20 years and parade them as trophies,” he said. “What value has that added? You waste money and deceive yourself.”
Licensing Now Strictly Under the PIA
Lokpobiri said the 2025 licensing round will operate fully under the Petroleum Industry Act (PIA), which requires a transparent, competitive, and non-discriminatory bidding process.
He cited Sections 73 and 74 of the PIA, which mandate that the government award Petroleum Prospecting Licences (PPLs) and Petroleum Mining Leases (PMLs) based on financial capacity, technical competence, and work programme commitments.
“In the past, some winners lacked the capacity or intention to develop their assets. Many simply held blocks for speculation, hoping to sell later at a profit. That era is over,” he said.
He urged firms that lack capital to form partnerships instead of bidding alone. “If you have technical skills but lack funding, partner with those who have financial capacity. That is how you build a viable business.”
Regulator Backs Tougher Enforcement
The Chief Executive of the NUPRC, Oritsemeyiwa Eyesan, supported the minister’s position and said the PIA now empowers regulators to withdraw idle assets.
“Before the PIA, the system encouraged block sitting. Today, if you do not work your block, we will take it back,” she said. “Many of the assets on offer today come from fallow fields.”
Eyesan said the commission has introduced reforms to strengthen transparency, improve access for serious investors, and ensure that only technically and financially capable operators retain licences.
She also said President Bola Tinubu has approved revisions to signature bonuses and other pre-production fees to lower entry barriers while preserving commercial discipline.
Production Growth and Faster Approvals
Eyesan said the commission now prioritises production growth and revenue expansion by recovering shut-in volumes, arresting output decline, reducing losses, and accelerating time to first oil.
She said the commission has already reactivated a long-shut-in asset and plans further recoveries across the sector.
To improve efficiency, the NUPRC will publish Service Level Agreements (SLAs) for approvals, launch digital workflows for permitting and reporting, and commit to time-bound regulatory decisions. It will also run a 90-day fast-track programme for near-ready field development plans, well interventions, and rig mobilisation.
“For mature projects, submit applications by the end of the first quarter of 2026,” Eyesan said. “That timeline will allow us to provide a simplified, holistic framework with clear obligations for both operators and the regulator.”
Governance, Host Communities and Decarbonisation
Eyesan said the commission will measure performance through faster approvals, higher and more secure production, disciplined acreage management, and stronger health, safety, and environmental standards.
She pledged to strengthen governance, data integrity, and hydrocarbon accounting, stressing that regulators must track every barrel and address losses quickly.
On host communities, she said the NUPRC will engage community leaders directly to enforce compliance with the Host Community Development Trust (HCDT) provisions of the PIA.
She also announced a target of full PIA compliance within 12 months, supported by quarterly progress reports and a dedicated monitoring team within her office.
Future Licensing and Industry Engagement
Eyesan said the commission will begin preparatory work for the 2026 bid round alongside the 2025 process to ensure continuity and predictability in licensing.
She also unveiled plans for a monthly leadership forum involving operators, NNPC, industry groups, and emerging players to address approval timelines, production restoration, infrastructure integrity, and gas development.
“This engagement will help us identify systemic bottlenecks and give investors greater certainty,” she said.
