The diversion of oil Investments by International Oil Conpanies (IOCs) to other oil producing countries in Africa has been a major challenge confronting Nigeria’s oil industry. Platforms Africa examines how the dip in Foreign Direct Investments Into the oil and gas sector is posing a big threat to the 2025 oil blocks bid round
Nigeria has taken significant strides in revitalizing its oil and gas sector by launching new bid rounds for oil blocks. The 2024 oil bid round, which offered 12 oil blocks alongside seven deep offshore blocks, has seen participation from major players, including TotalEnergies Exploration and Production Company, MRS Oil and Gas Limited, and Sahara Deepwater Resources Limited.
Stakeholders at the last NOG Energy Week held in Abuja in May 2024 have earlier called for accelerated and transparent auctioning of the oil blocks.
At a panel session themed; “Exploring Oil Prosperity; Need For More Accelerated And Transparent Bid Round,” the stakeholders who expressed interest in the progress of the 2024 bid round, called for more of the programme to free some idle blocks.
So, when on December 18, 2024, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced the recovery of Idle Oil Blocks in the country as it announced a fresh oil licensing round for 2025, not a few stakeholders in the industry was excited.
To Gbenga Komolafe, Commission Chief Executive of the NUPRC, who made the announcement at the 2024 Licensing Round Commercial Bid Conference In Lagos, the 2025 licensing round would focus on underexplored assets, fallow fields, and natural gas development as part of Nigeria’s commitment to the UN Sustainable Development Goals.
Industry stakeholders, however, expressed reservations that beyond the aura of oil blocks bid round, investment inflow is and has always been a major hurdle.
Scaling The Hurdle
According to Wunmi Iledare, a Professor of petroleum economics, “to further attract international investment, Nigeria can focus on some key areas including the Policy Reforms by implementing favorable fiscal provisions, such as those outlined in the Petroleum Industry Act (PIA), to encourage investment and boost production levels. The PIA has been instrumental in modernizing Nigeria’s oil and gas sector, offering a clearer framework for investors.
Another area is investment in infrastructure development to enhance trade competitiveness and attract investors. This will also help to reduce costs and increase efficiency in the oil and gas sector.
“Furthermore, the government should ensure transparency and stability in regulatory processes to build confidence among investors. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has pledged to maintain transparency in the bid process, which is crucial for attracting investment.”
A petroleum engineer, Adebayo Alamutu, who highlighted the key takeaways from the 2024 Bid Round, said that the NUPRC should keenly follow the same guidelines it used for the bid round in its new programme.
“The 2024 bid round has yielded promising results, with 31 oil licenses awarded to 25 companies. Notably, local and regional players have emerged as major winners, with only one International Oil Company (IOC), TotalEnergies, securing a license. This has come to demonstrate the success recorded by the government through its local content development,” Alamutu said.
The PIA’s focus on increased efficiency and transparency, he added, has contributed to a more competitive bidding process.
Looking Ahead to the 2025 Licensing Round, the Port Harcourt-based petroleum engineer said; “The NUPRC has announced plans for a 2025 licensing round, focusing on underexplored assets, fallow fields, and natural gas development. This presents an opportunity for Nigeria to attract further investment and strengthen its position in the global energy market.
“By prioritizing policy reforms, infrastructure development, and regulatory stability, Nigeria can enhance its appeal to international oil and gas companies and unlock its vast energy potential,” he concluded.
Platforms Africa
