VP Shettima: NUPRC Nigeria Oil Block Competitive Bidding Confirmed

• Vice President Kashim Shettima declared that Nigeria now awards oil blocks through open and competitive processes, citing a friend's success without political connections.
• The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), established by the 2021 Petroleum Industry Act (PIA), oversees these transparent licensing rounds, including the 2024 Licensing Round and the recently concluded 2025 round, for which winners were announced in July 2026.
• These reforms aim to attract long-term hydrocarbon investment, improve crude oil production, and have positioned Nigeria as Africa's leading oil and gas investment destination for two consecutive years.
• The PIA has provided clear rules for investors and granted host communities greater ownership over resources, contributing to improved production stability and investor confidence.
• The government is actively working to address historical barriers to investment, such as high costs and protracted contracting procedures, through new directives.

This commitment underscores a significant shift towards merit-based allocation, signaling to potential investors that success in securing upstream assets now hinges on robust technical and financial proposals rather than political influence.

Vice President Kashim Shettima recently affirmed that the allocation of Nigeria's oil blocks is now conducted through open and competitive bidding processes. Speaking at the fifth anniversary celebration of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Abuja, where he represented President Bola Tinubu, Shettima highlighted this development as clear evidence of the transparency embedded within the ongoing Nigerian upstream petroleum reforms. He personally attested to the integrity of the system, sharing an anecdote about a friend who successfully secured an upstream asset through a fair and just process, entirely without recourse to political connections.

This commitment underscores a significant shift towards merit-based allocation, signaling to potential investors that success in securing upstream assets now hinges on robust technical and financial proposals rather than political influence. Shettima further declared the Federal Government's unwavering determination to position Nigeria as a premier destination for long-term hydrocarbon investment. He provided assurances to investors regarding the clarity of terms and the government's steadfast resolve to enforce compliance and accountability across the sector. These remarks coincide with broader government efforts to introduce reforms specifically designed to attract fresh capital into the oil and gas industry, boost crude oil production, and dismantle historical barriers that have deterred investment in Nigeria's petroleum resources.

The framework for these transformative changes is rooted in the Petroleum Industry Act (PIA), enacted in 2021, which led to the establishment of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The NUPRC is mandated to regulate the upstream petroleum sector, overseeing the administration of petroleum resources, including critical functions such as licensing, lease management, and field development. Since its inception, the Commission has actively conducted various licensing and bidding processes, notably including the 2024 Licensing Round and the recently concluded 2025 oil licensing round, which saw significant interest from both local and international companies vying for available oil blocks under the NUPRC Nigeria oil block competitive bidding framework, with winners for the 2025 round announced in July 2026.

According to Vice President Shettima, the PIA has brought an end to years of uncertainty that plagued the industry, providing a predictable framework and establishing clearer rules for investors. He specifically acknowledged Senator Ahmed Lawan for his pivotal role in shepherding the passage of the PIA Bill. Beyond investor clarity, the legislation also significantly empowers host communities, granting them a greater stake and ownership over the resources situated beneath their lands. The NUPRC was specifically created to implement this new petroleum law, and its efforts have been instrumental in improving oil production figures and restoring investor confidence in Nigeria’s upstream sector.

The comprehensive reforms have demonstrably strengthened Nigeria's standing as Africa's leading destination for investment in the oil and gas sector, a position it has maintained for two consecutive years. The NUPRC's operational effectiveness, coupled with the clear regulatory environment fostered by the PIA, has been crucial in this resurgence. The nation has transitioned from a period marked by substantial crude production losses due to theft and vandalism to a more stable and robust output environment.

This positive shift is attributed to the collaborative efforts of security agencies, industry operators, host communities, and the NUPRC. The improved security and operational stability have led to a noticeable return of investors who had previously sought opportunities elsewhere. Furthermore, the enhanced engagement with host communities, a key provision of the PIA, has contributed to stability in oil-producing regions. Over 170 communities have already benefited from various projects, including initiatives in education and healthcare, which were selected directly by the communities themselves.

Despite the significant progress, the Federal Government remains committed to tackling lingering challenges that have historically deterred investment in the sector. Vice President Shettima indicated that efforts are underway to address the high operational costs and the lengthy contracting processes that have previously acted as disincentives for potential investors. To streamline these procedures and foster a more attractive Nigeria oil and gas investment climate, several presidential directives and executive orders have been introduced.

These ongoing initiatives underscore a holistic approach to reform, aiming not only to ensure transparency in oil block awards but also to create an overall environment conducive to sustained long-term investment. The focus on reducing bureaucratic hurdles and operational expenses is expected to further enhance Nigeria's competitiveness and reinforce the positive trajectory set by the NUPRC and the PIA.

Lawyers advising clients in Nigeria's upstream oil and gas sector should note the government's stated commitment to transparent, competitive bidding for oil blocks under the NUPRC and PIA. This signals a shift away from politically-driven awards, requiring clients to focus on robust technical and financial bids and compliance with regulatory frameworks rather than political connections.

Source: Original reporting via Punch