Oil block bidding: Inside Nigeria’s seven-hour transparency test
July 24, 2026 3:12 am
After years of opaque allocations, Nigeria’s latest seven‑hour oil block bidding saw 31 winners from 143 bidders, but doubts over transparency and capacity persist as the 2026 round approaches, DAMILOLA AINA reports
For years, the allocation of Nigeria’s oil blocks was often associated with long gaps between licensing rounds, regulatory uncertainty and questions about how the country’s prized petroleum assets were awarded.
But on Tuesday, the process unfolded in full view.
Inside the lavishly decorated green-and-white hall of the Transcorp Centre in Abuja, more than 50 tables were occupied by oil executives, bidders, observers, regulators and journalists, all focused on the screens and proceedings that would determine the next owners of Nigeria’s oil and gas assets.
The atmosphere was a sharp departure from the uncertainty that had long characterised the allocation of the country’s petroleum assets. For hours, companies competed for blocks in a transparent and closely watched process, each hoping to secure a foothold in one of Africa’s most resource-rich oil provinces.
The commercial bid conference, organised by the Nigerian Upstream Petroleum Regulatory Commission, marked the culmination of an eight-month licensing process and the second consecutive year in which companies have competed for Nigeria’s oil and gas assets through a structured bidding process.
It also signalled a significant shift in the way the country manages its upstream sector. Before the passage of the Petroleum Industry Act in 2021, Nigeria’s competitive oil block auctions were not conducted on a regular or predictable basis. Major licensing rounds were often separated by years, with regulatory uncertainty, litigation and discretionary allocations by the government of the day contributing to a system that lacked a consistent bidding calendar. The current process, however, is beginning to change that narrative.
Following the 2024 licensing round, the 2025 commercial bidding process has now been concluded, with another round expected in 2026. The development marks the emergence of annual competitive licensing rounds as a more structured feature of Nigeria’s upstream oil industry.
For a sector that once endured a 17-year gap between major general oil block bid rounds, the return of consecutive annual competitions represents more than an administrative change. It is a deliberate attempt to create a predictable investment environment, attract fresh capital and accelerate the development of Nigeria’s vast but largely underdeveloped hydrocarbon resources.
This Licensing Round was announced by the Federal Government on 11 November 2025, in accordance with the Petroleum Industry Act 2021. Fifty oil and gas blocks were offered across seven sedimentary basins, including 16 blocks in the Niger Delta Onshore, 18 in the Niger Delta Shallow Water and one in the Niger Delta Deep Offshore. The assets also include three blocks in the Benin Basin Onshore, four in the Anambra Basin Onshore, four in the Chad Basin Onshore and four in the Benue Trough.
The bid portal opened on 1 December 2025, while a pre-bid conference was held on 14 January 2026. Registration closed on 27 February, with prequalification completed on 16 March.
But beyond the spectacle of open competition lay the more important question: how transparent was the process, and did the results stand up to scrutiny?
The Commission Chief Executive of the NUPRC, Oritsemeyiwa Eyesan, in her welcome address, delivered the first head-spinning blow that the highest financial bidder would not automatically emerge as the winner of an oil block in the ongoing 2025 Licensing Round, insisting that technical competence and operational capability would play a decisive role in determining successful bidders.
She also revealed that 13 frontier basins of the 50 oil and gas blocks offered under the 2025 Licensing Round failed to attract commercial bids and would be returned to the government’s licensing basket.
Three of the four marketed blocks in the Chad Basin received no bids, while two blocks each in the Benue and Benin basins were ignored. More significantly, six blocks in the Niger Delta also failed to attract bidders, raising fresh questions over the commercial attractiveness of the 2025 licensing round despite repeated assurances by regulators that investor confidence had returned.
The PUNCH reports that oil blocks without bids include Ayama PPL 2A52 in the shallow waters of the Niger Delta, Foniwetoiro PPL 2A37, Olori PPL 2A36, Misty PPL 2A35, Kenam PPL 2A34 and Ikuru PPL 2A31, alongside PPL 309, PPL 307, PPL 802, PPL 803, PPL 701, PPL 702 and PPL 703 located across the inland basins.
The 13 blocks that attracted no bids provided the first visible test of the process. They were left unallocated, rather than being forced into a contest that did not exist. But the bigger test of transparency lay with the remaining 37 blocks, where competition was fierce, and the question was no longer whether there were bidders, but how the winners were chosen.
Earlier, officials of the commission explained that the commercial bid process was designed to eliminate human interference through an automated weighted scoring system.
According to the commission, technical evaluations had already been concluded before the commercial bids were opened publicly.
Officials said no one, including members of the evaluation team, had access to the commercial bids before the public opening.
The commission explained, “Nobody has seen the commercial bids. Everybody will see them here. Except the companies that submitted their own bids. If there is a tie, the tied bidders will be invited to resubmit using only the signature bonus as the determining parameter.”
It explained that bidders were first assessed based on technical competence, organisational capacity, work programme, project implementation schedule and financial capability before the commercial evaluation.
The commission added that signature bonuses accounted for only a fraction of the total scoring system.
It stated, “The weighted score is 40 per cent. All these things are automated. The computer calculates everything. Nobody is using a pen to write any figures. This demonstrates the transparent, efficient and robust process built into this licensing round.”
Officials further explained that bidders were invited alphabetically on an asset-by-asset basis, while companies competing for the same block witnessed the opening of their bids simultaneously.
Immediately after each commercial bid was uploaded, the system automatically generated the technical score, commercial score, aggregate score, preferred bidder and four reserve bidders.
The PUNCH observed that the commercial bid conference started at past 11 and ended at exactly 6:13 p.m., marking a seven-hour rigorous but seamless bidding process witnessed by government officials, bidders and independent observers.
Representatives of the Federal Ministry of Petroleum Resources, the Federal Ministry of Finance, the Nigeria Extractive Industries Transparency Initiative, accredited bidders and a designated member of the public jointly signed authentication documents confirming the winning bids before the exercise was concluded.
Our correspondent observed that the atmosphere remained calm throughout the proceedings despite the keen competition among bidders.
The commission announced that 31 companies emerged successful after 143 companies submitted about 200 bids for 37 oil and gas blocks out of the 50 assets originally offered during the licensing round.
A striking feature of the round is the largely indigenous nature of the winners. Publicly available information and the reporting trail suggested that most of the successful bidders are Nigerian-owned or Nigeria-based firms, while major international oil companies such as Shell, TotalEnergies, ExxonMobil, Eni and Equinor were absent from the final winners’ list.
Recall that Eyesan had said the licensing round was designed to attract both local and foreign investors.
An official of one of the successful companies, who requested anonymity because he was not authorised to speak publicly, commended the commission for the organisation of the exercise but called for a completely electronic bidding process.
He said, “The use of weighted average for scoring bidders was just introduced. It wasn’t there before. We don’t have a choice. The system can even be manipulated to suit preferred bidders because people are still behind it. But in my view, the commission performed very well in organisation and execution.”
The official argued that removing every manual stage of the process would further strengthen public confidence in future licensing rounds.
The competition came with an unusual restriction. The PUNCH reports that companies were limited to a maximum of two asset bids during the exercise, a measure designed to broaden participation across the industry. The restriction, however, did little to dampen the contest, as companies still committed an additional $23.8m in signature bonuses to break deadlocks and secure winning or reserve-bidder positions.
Commenting on the process, a Professor of Energy at the University of Lagos, Dayo Ayoade, said the 2025 licensing round had largely complied with the competitive principles introduced by the Petroleum Industry Act, but warned that questions could still arise over how the final decisions were reached.
Ayoade, who spoke in a telephone conversation with The PUNCH on Thursday, said the process represented a departure from the discretionary allocation of oil blocks that had characterised previous licensing regimes.
“The concluded 2025 licensing round met some of the rules that the Petroleum Industry Act 2021 put in place. We now have competitive bids as opposed to discretionary allocation. The commission now publishes in advance the qualifications that are required and there is the use of a digital licensing platform.
“There is also a requirement that applicants demonstrate their capacity, both technical and financial, as well as their commitment to the environment. Maybe where the problem may lie is that substantial transparency might be questioned.
“We have transparency in the process but not so much on the decision-making end. That is the valuation criteria and how it was weighted. What could be useful is the publication of the evaluation report and the scoring after the bid.
“That will allow external and independent people to better understand the decision-making process and whether it is fair and in the best interest of the Nigerian public,” he said.
Ayoade said the publication of the evaluation criteria and post-bid scores would help strengthen public confidence in the licensing process, particularly where relatively unknown companies emerge ahead of established industry players.
He also called for greater scrutiny of the process by the Nigeria Extractive Industries Transparency Initiative, describing the organisation as an independent oversight body that should be involved in examining both the procedures and outcomes of the licensing exercise.
“NEITI is an independent oversight body. They are supposed to be involved in the procedures and outcomes. It will be interesting to hear the view of NEITI on this process,” he said.
The energy professor warned that the emergence of unknown companies above established players could revive concerns associated with the discretionary allocation of oil blocks under the former Department of Petroleum Resources.
“When unknown companies are selected above established players, there is a danger or spectre that the bad old days of the DPR, where discretion played a role, may be returning. It is very important for the regulator to avoid transparency washing, meaning using the image of transparency to justify actions that might not be transparent.
“Transparency must be real and it has to be seen to be real. Having more companies is not about the number of companies. It is about the seriousness of the companies. It is about the record of the companies. Do they have the capacity to do the work? I think that would be what one would be interested in,” Ayoade said.
On whether the highest bidder should automatically win an oil block, he said the government must balance the financial value of bids with the technical capacity of the companies seeking to develop the assets.
He said, “You can’t have one or the other. Yes, the government likes high bids because that is immediate money in the government’s pocket through signature bonuses and other licensing fees. But that high bidder can also be a speculator and might not efficiently work the assets.
“On the other hand, technical bidders are usually the experienced hands and investors. They are not speculating and they know exactly what they want to do.
“So, in normal terms anywhere in the world, the government requires a hybrid of both financial and technical capacity. The companies must demonstrate a strong work programme and local content. What are you doing for the country and what have you done?
“All of these will, of course, be in the NUPRC’s current template.”
The expert also expressed doubts about the ability of the licensing rounds alone to deliver Nigeria’s ambitious target of increasing crude oil production to three million barrels per day.
Ayoade said the country’s prolonged delay in reforming the petroleum industry had contributed to years of stagnation, warning that newly awarded oil blocks could take several years before contributing significantly to national production.
He noted, “The journey to reach three million barrels per day is going to be long. We have had many years of stagnation. The 19 years it took to decide on the Petroleum Industry Act set us back literally decades.
“Some of us complained that the golden goose that the whole country lives on was being strangled, and that is what the whole world is seeing. Immediate needs are what we need because licensing rounds are fine, but some of these will not result in fields. Some of the fields will only come into play maybe 10 years down the line.
“So, we are not going to get to three million barrels overnight. If we are searching for three million barrels, it should not be through licensing rounds per se.”
Rather than relying solely on new licensing rounds, Ayoade urged the government and regulators to focus on bringing abandoned or underperforming fields back into production by creating incentives for operators and reallocating assets to companies with proven technical and financial capacity.
He said some fields had been abandoned after operators lost interest because the financial returns no longer made commercial sense, adding that the government should examine ways of making such assets attractive again.
“It could be in trying to open up fields that have already been producing at some point and were abandoned, or where the company lost interest because the financial numbers no longer made sense to them.
“We need to see how we can help those companies through incentives to go back to those fields and reopen them, or reallocate the marginal fields more efficiently to serious players who already have the technical and financial capacity right now and not tomorrow,” Ayoade said.
He further warned against awarding oil fields to companies without clearly establishing the identities of their ultimate owners, saying beneficial ownership disclosures would be critical after the licensing process.
“It is always going to be a problem when we issue fields to unknown entities. That is why the beneficial ownership provisions must come into play after the licensing rounds. Who are the true owners of these fields?
“Because if licences are being awarded to proxies or politically exposed people, then that could become a problem for us,” he said.
Another energy expert, who pleaded anonymity, described the 2025 oil and gas licensing round as a positive development that could help Nigeria move closer to its long-standing crude oil production target, but raised concerns about the transparency of the process and the high signature bonuses attached to some of the awarded blocks.
The expert, who participated in the bidding process, said the movement into Nigeria’s inland basins was particularly encouraging, although security challenges and other operational hurdles could affect the development of the assets.
“If you look at the process from the face value, it is good. We are moving and that will help Nigeria to achieve the three million barrels per day target. But the question is whether the process and procedures for all those things are transparent, open and credible,” the expert said.
The participant disclosed that his company emerged as the winner of one of the blocks but expressed concern over the financial commitment required to secure the asset.
“My company got one block, but the signature bonus is too much. However, I think overall, it is a good exercise, and that is if the communities will allow it and everybody will work towards increasing Nigeria’s crude oil production, a target that has been there for many years but nobody has been able to meet,” he added.
He also welcomed the decision to expand exploration activities to inland basins, including the Benue Trough, noting that the move could unlock new sources of crude oil and support the country’s production growth.
“It is also good that we are moving into the inland basins, the Benue Trough and other inland basins. But the question is whether the kidnappers will allow work to take place in those areas. If they do, then it is a good one,” the expert stated.
According to him, winning a government licence is only the beginning of the process, as investors still have to overcome several challenges, including security concerns, community relations, financing and the technical difficulties associated with developing inland oil assets.
“There are still a lot of hurdles to cross, apart from getting a government licence. There are still a lot of challenges, but Nigerians have shown that they can manage the inland basins better than international companies, and that is why we are making progress in our crude oil production on a daily basis,” he said.
The expert, however, described the licensing round as a positive step overall, stressing that the success of the exercise would ultimately depend on the ability of the winners, government and host communities to work together to develop the assets and translate the awarded blocks into actual production.
“The process was a good one overall for me. The most important thing now is for the blocks to be developed, for the communities to support the operators and for the government to ensure that the environment is secure and conducive enough for investment. If that happens, the licensing round can contribute significantly to the country’s efforts to increase crude oil production,” he said.
With 143 companies submitting about 200 bids for 37 of the 50 blocks on offer, the emergence of only 31 winners means that dissatisfaction and complaints are almost inevitable.
For the unsuccessful bidders, however, the conclusion of the 2025 round should not mark the end of the road.
President Bola Tinubu has already approved another licensing round for 2026, providing a fresh opportunity for companies that lost out to return to the contest.
The challenge for the NUPRC will be to ensure that the lessons, questions and complaints arising from the latest exercise are addressed before the next round begins, so that the 2026 competition is not only more competitive but remains more transparent and trusted by all participants.
Damilola Aina is a journalist at Punch Newspapers with over five years of experience covering energy, business, investment, infrastructure, and property sectors. He specializes in producing well-researched and insightful reports that inform readers and provide clarity on complex topics. Damilola’s work demonstrates practical newsroom experience, editorial insight, and a strong commitment to accurate and engaging journalism.
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