FG returns 13 oil blocks
The Federal Government has returned 13 oil and gas blocks to the national licensing basket after the assets failed to attract bids during Nigeria’s 2025 Licensing Round.
Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Oritsemeyiwa Eyesan, announced the decision on Tuesday at the Commercial Bid Conference in Abuja.
Eyesan said the government initially offered 50 oil and gas blocks to prospective investors, but bids were received for only 37 assets. Consequently, the remaining 13 blocks will be retained in the licensing pool for possible consideration in a future exercise.
The announcement that the FG returns 13 oil blocks is one of the clearest outcomes of the licensing process, which attracted interest from hundreds of indigenous and international companies.
According to the regulator, almost 300 companies initially expressed interest in the licensing round. Following prequalification, 196 applicants were found eligible to proceed, while 143 companies eventually submitted about 200 technical and commercial bids covering 37 assets.
Why FG returned the 13 oil blocks
The 13 blocks were not withdrawn because the government had discovered legal defects or revoked earlier awards. They were returned to the basket because no investor submitted an acceptable bid for them during the exercise.
Eyesan explained that while 50 blocks were made available, prospective investors showed active interest in only 37. The announcement that the FG returns 13 oil blocks therefore reflects the market’s response to the specific assets offered rather than a general rejection of Nigeria’s upstream petroleum sector.
The regulator had not, at the time of the announcement, publicly identified the particular 13 blocks that failed to receive bids. It would therefore be premature to claim that they were concentrated in any single geological basin.
The original licensing guidelines listed 50 Petroleum Prospecting Licence areas, ranging from PPL 2A29 to PPL 803. The assets were spread across onshore, shallow-water, deep-offshore and frontier terrains.
Reports indicate that the entire licensing basket comprised 16 onshore Niger Delta blocks, 18 shallow-water blocks, one deep-offshore block, three Benin Basin assets and four blocks each in the Anambra Basin, Chad Basin and Benue Trough.
Strong interest despite unclaimed assets
Although the fact that the FG returns 13 oil blocks may appear to signal weak investor appetite, the broader figures present a more complicated picture.
Almost 300 companies expressed initial interest, 196 passed the prequalification stage and 143 eventually submitted about 200 bids. Some companies submitted bids for more than one block, explaining why the number of bids exceeded the number of participating firms.
Eyesan described the participation as evidence of renewed confidence in Nigeria’s upstream sector. The bidders reportedly included indigenous operators, established international companies, new entrants and businesses already operating in the country.
However, investor interest should not be measured only by registration figures. The failure of 13 assets to attract bids suggests that investors distinguished between blocks based on geological potential, available data, development cost, security exposure, distance from infrastructure and anticipated commercial returns.
In a competitive petroleum market, companies are increasingly selective about exploration spending. An asset may have hydrocarbon potential but remain commercially unattractive where the cost of seismic acquisition, drilling, infrastructure development or security is considered too high.
The government should therefore conduct a detailed review to determine why no bids were submitted for the affected blocks before offering them again.
Highest financial bid will not automatically win
The government also clarified that the highest financial offer would not automatically secure an oil block.
Eyesan said the commission would evaluate technical competence, operational experience, organisational capacity, proposed work programmes, resource commitments and the bidder’s ability to execute projects within the stated timeline.
The licensing guidelines confirm that commercial evaluation combines technical performance, signature-bonus commitments and work-programme obligations. The winning bid is expected to be the one offering the best long-term value to the government, not necessarily the largest immediate payment.
This approach is important because Nigeria has a long history of petroleum licences being awarded to companies that later failed to develop the assets.
An oil block should not be treated as a trophy, an instrument of political patronage or an asset to be held for speculative resale. A successful bidder must have the financial strength, technical expertise and operational plan required to move from licensing to seismic work, drilling, field development and production.
The announcement that the FG returns 13 oil blocks should therefore not pressure the regulator into lowering its standards merely to ensure that every asset is allocated.
Leaving a block unawarded is preferable to granting it to a company without the ability or intention to develop it.
NUPRC warns against dormant licences
The NUPRC has repeatedly said that the era of companies holding petroleum licences without developing the underlying assets is over.
Eyesan warned that successful bidders would be expected to begin work on the assets rather than celebrate the awards as ceremonial victories. She said the commission could recover assets from operators who failed to act within the timelines permitted under the Petroleum Industry Act’s “drill or drop” provisions.
Successful commercial bidders must also satisfy post-bid conditions. These include paying the required signature bonuses and first-year rents, providing guarantees and executing the necessary contractual documents within the prescribed period.
Emerging as a preferred bidder is therefore not the same as receiving an unconditional Petroleum Prospecting Licence.
The government’s decision to enforce performance conditions will be crucial. Previous licensing exercises have sometimes produced paper awards that failed to translate into new reserves or additional production.
Licensing round targets new reserves and production
The 2025 Licensing Round forms part of Nigeria’s effort to reverse years of inadequate investment in oil and gas exploration.
The official guidelines state that the exercise is intended to grow reserves, increase production capacity, expand gas utilisation, attract value for government assets and strengthen indigenous participation and technology transfer.
Eyesan said the assets that attracted bids could potentially add about 500 million barrels to Nigeria’s reserves and unlock approximately 300,000 barrels of additional daily production within three years.
She placed Nigeria’s existing reserves at about 37.01 billion barrels and linked the licensing exercise to the country’s ambition of reaching three million barrels of daily production by 2030.
These projections remain targets rather than guaranteed outcomes. Oil production does not begin immediately after a licensing round. Successful operators must complete contracting, raise capital, acquire seismic data, drill exploration and appraisal wells, prepare development plans and construct the required infrastructure.
Some blocks may take several years to produce their first barrel, while others may never reach commercial production if exploration results are disappointing.
The fact that the FG returns 13 oil blocks therefore does not immediately affect Nigeria’s current production. Its significance lies in what it reveals about investor preferences and the attractiveness of individual assets.
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Transparency will determine public confidence
The Commercial Bid Conference was designed as a transparent stage in which qualified commercial bids were opened and assessed.
The NUPRC said evaluation criteria and technical requirements had been published before the exercise and explained through the pre-bid conference, webinars and engagement channels. Representatives of the Nigeria Extractive Industries Transparency Initiative reportedly observed the bid-opening and technical-evaluation processes.
The licensing guidelines also require bidders to disclose beneficial ownership information and comply with anti-corruption provisions.
These safeguards are necessary because oil-block awards have historically attracted concerns about political influence, opaque ownership and the participation of companies lacking sufficient capacity.
For the process to earn lasting public confidence, the regulator should publish the identities of successful and reserve bidders, the blocks involved, the evaluation framework and the obligations attached to each award, subject to legitimate commercial-confidentiality restrictions.
It should also disclose the affected assets when the FG returns 13 oil blocks to the licensing basket. Investors and the Nigerian public need to understand whether the blocks failed to attract bids because of limited geological data, high development costs, security concerns or other commercial factors.
Unclaimed blocks require fresh evaluation
Before the 13 assets are reoffered, the government should reassess their technical and commercial attractiveness.
The NUPRC may need to improve the geological information available to investors, commission additional seismic studies or reconsider the commercial terms attached to the blocks.
The licensing guidelines acknowledge that geological, geophysical and well data exist over some blocks and advise bidders to conduct independent technical and financial evaluations.
Where an asset is located in a frontier basin with limited data, investors may be reluctant to commit substantial capital without stronger evidence of petroleum potential.
For blocks in mature producing areas, the concerns may be different. Companies may examine access to pipelines, host-community relations, environmental liabilities, security risks and the condition of surrounding infrastructure.
Returning the blocks to the basket gives the government an opportunity to address these issues instead of rushing the assets into an award that may later become dormant.
Government must convert bids into production
The success of the 2025 Licensing Round will not ultimately be judged by the number of companies that registered or the amount promised in signature bonuses.
It will be judged by the number of wells drilled, discoveries made, projects developed, jobs created and additional barrels brought into production.
The announcement that the FG returns 13 oil blocks is only one stage in a much longer process. The more important task is ensuring that the 37 assets which attracted bids are awarded to companies capable of developing them.
The government must resist pressure to use the process solely as a source of immediate revenue. Excessively high signature bonuses can weaken an operator’s ability to fund exploration and development after securing an award.
A balanced evaluation should prioritise credible work programmes, access to finance, technical competence, environmental responsibility and realistic production schedules.
A test of Nigeria’s upstream reforms
The 2025 Licensing Round is a major test of the regulatory system established under the Petroleum Industry Act.
Nigeria needs new investment to expand reserves, increase production and develop natural gas resources. But it also needs to avoid repeating the mistakes of past licensing exercises in which some assets remained undeveloped for years.
The decision that the FG returns 13 oil blocks should not automatically be interpreted as a failure. In a transparent market process, not every asset must receive a bid.
The more important question is whether the government will study the market’s response, improve the quality of data and terms attached to the unclaimed blocks, and maintain strict standards when the assets are offered again.
For the 37 blocks that attracted interest, the regulator must ensure that the eventual winners possess more than ambitious financial offers. They must demonstrate the capacity to explore, develop and produce.
Nigeria’s oil industry does not need another collection of dormant licences. It needs responsible investors prepared to turn underground resources into measurable production, public revenue, employment and long-term economic value.
