The Federal Government has issued a firm warning to oil companies holding undeveloped licences, stating that failure to actively develop oil wells could result in the revocation of their assets. The move signals a crackdown on speculative practices in the country’s upstream petroleum sector.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, told investors at the 2025 NUPRC pre-bid conference in Lagos that the days of holding licences for status or resale are over. He emphasised that bidding fees are non-refundable and no swaps or compensation will be allowed for underdeveloped blocks.
“Some companies have held licences for decades without any production, treating them as trophies rather than working assets. That practice will no longer be tolerated. Operators must develop their blocks or risk losing them,” Lokpobiri said. He encouraged companies lacking financial capacity to form partnerships with credible investors to ensure their bids are viable.
The Minister also reminded bidders that the 2025 licensing round will follow the Petroleum Industry Act (PIA), which mandates transparent, competitive awards based on financial, technical, and operational capability.
NUPRC Chief Executive, Oritsemeyiwa Eyesan, reinforced the government’s position, noting reforms designed to make licensing more predictable and efficient. She revealed reductions in the signature bonus to lower barriers to entry and outlined steps to accelerate time-to-first oil, recover shut-in assets, and strengthen regulatory oversight.
Eyesan added that the Commission will run preliminary processes for the 2026 bid round alongside the current round, launch a digital workflow for permitting and reporting, and convene a monthly operators’ forum to address bottlenecks in production, infrastructure integrity, and gas development.
The Commission will also enforce stricter hydrocarbon measurement, engage host communities effectively, and ensure compliance with the PIA within 12 months, with quarterly progress reports to track developments in high-impact shut-in fields.
“The government’s priority is clear: licences are for companies committed to developing Nigeria’s hydrocarbon resources. Those unwilling or unable to do so will forfeit their rights,” Eyesan said.
