Nigeria’s upstream oil and gas sector opens a new chapter on 1 December 2025 with the commencement of its next licensing round, as announced by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The move signals a renewed push to attract investment, boost production and align with President Bola Tinubu’s ambition of a ₦1-trillion economy.
During the “Project 1 MMBOPD Additional Production Investment” forum held in London, NUPRC Chief Executive Engineer Gbenga Komolafe announced that the 2025 licensing round would begin on 1 December, following approval under the Petroleum Industry Act (PIA 2021). He emphasised that funding remains the biggest hurdle in the upstream sector and the commission is now re-positioning itself as a “business enabler” to connect investors, lenders and operators. Businessday NG
The licensing round offers exploration and production rights across undeveloped fields, cluster developments and frontier assets. According to Komolafe, Nigeria’s crude production now averages around 1.71 million barrels per day (mbpd) with a peak of 1.83 mbpd figures seen as positive indicators for incoming investors.
Nigeria’s upstream reforms under PIA have aimed to reduce regulatory bottlenecks, increase transparency, and attract capital. By launching this round, the government seeks to raise output by an additional one million barrels per day, boost export earnings, stimulate employment and deepen the oil-service value chain.
For investors, the offer represents both risk and opportunity. With global oil markets in flux, Nigeria’s reserves, competitive fiscal terms and reform commitments are being tested. The country offers potential upside but execution, infrastructure and security remain key variables.
Several factors are likely to determine success:
Fiscal terms and contract clarity: Investors will assess royalty, profit-share, cost recovery terms and host-community liabilities.
Security and infrastructure: The Niger Delta and deep-water areas still face disruption risks, supply-chain challenges and high development costs.
Local content and financing: The ability to partner locally, access financing and manage project delivery will influence outcomes.
Global energy transition: While oil remains vital for Nigeria’s economy, investors are increasingly attentive to ESG factors, gas-value chains and LNG opportunities.
The timing of the licensing round is notable. With the global energy transition accelerating, Nigeria may be offering a rare entry point into conventional upstream assets with reform momentum, low base production and latent reserves. Moreover, the government’s push to diversify away from oil dependence adds context to the licensing round as part of broader economic strategy.
From the government’s perspective, the licence awards are not just about oil output, they are about value-addition, industrial jobs, export diversification and integration into global supply chains. Upstream development can spur construction, services, local fabrication, logistics and petrochemicals.
For local communities and states, the licensing round carries hope of jobs, infrastructure, revenue and upstream-driven growth. But past disappointments mean expectations are high and scrutiny will be intense. Firms will need to manage social licence-to-operate, community partnerships and environmental commitments carefully.
Implications for Stakeholders
Investors: The December licensing round opens doors to new assets and Nigeria’s upstream reform narrative. But financial models must incorporate risk: completion, currency, security and returns on new fields.
Oil-service firms & manufacturers: With new fields and cluster developments anticipated, local content opportunity is strong fabrication yards, logistics, afloat storage, field-services, and local workforce development may benefit.
Government & communities: Success depends on transparent award processes, community engagement, environmental management and infrastructure delivery. The potential payoff: higher production, export earnings, jobs and deeper value chain.
What to Monitor
Bid terms and contract awards: How attractive are the fiscal terms, exit rights, local content requirements and environmental conditions?
First field development announcements: Which blocks get taken up? What are the development timelines?
Financing commitment levels: Are banks, multilateral agencies and local financiers stepping up?
Production ramp-up progress: Will Nigeria demonstrate acceleration toward its one-million-barrel target?
Community and ESG outcomes: Are host-communities engaged? Are local content and environmental safeguards enforced?
The announcement of Nigeria’s 2025 upstream licensing round marks a recommitment to the oil-and-gas sector’s role in the broader economic agenda. It blends reform ambition, investment attraction and output growth in a pivotal moment for Africa’s largest economy. However, success hinges on execution, transparency and sustained investment. For investors, service providers and citizens alike, the December round is a landmark and its results will shape Nigeria’s oil-sector trajectory for years to come.
