From the mature fields of the Niger Delta to the largely untapped frontier basins of the Chad Basin, Benue Trough, Anambra Basin and Benin Basin, the conclusion of the 2025 licensing round has offered the clearest indication yet that the scramble for oil blocks is no longer confined to the country’s traditional hydrocarbon heartland. Beyond producing a new generation of operators, the exercise has revived interest in frontier acreage, tested the credibility of the licensing process and reinforced the push towards competition, transparency and investment-driven growth, WALIAT MUSA writes.

For decades, the story of oil exploration in Nigeria has revolved around one region. From the swamps of Bayelsa to the creeks of Delta and Rivers states, the Niger-Delta has remained the undisputed centre of the country’s petroleum industry, accounting for the overwhelming share of discoveries, production, investment and policy attention.

The conclusion of the 2025 licensing round has not only produced a new generation of operators, but has also brought an unexpected development into sharp focus – the growing appetite for assets outside the country’s traditional oil-producing belt.

When the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) opened bidding for 50 blocks across seven terrains eight months ago, expectations were largely centred on the familiar hydrocarbon provinces of the Niger-Delta. However, by the time the Commercial Bid Conference ended, the country’s frontier basins had emerged as one of the biggest talking points of the exercise.

For the regulator, the development represents more than a simple redistribution of assets. It signals a potential shift in the geography of investment and the beginning of a fresh chapter in the search for hydrocarbons.

About 300 companies initially indicated interest in the assets on offer. Following the pre-qualification process, 196 companies progressed to the next stage, while 143 companies eventually submitted approximately 200 technical and commercial bids for 37 blocks.

Of the 50 blocks placed on offer, 13 attracted no bids, while 31 companies eventually emerged as winners of 37 assets. The Niger Delta’s shallow-water terrain remained the most attractive, accounting for 18 awarded blocks, while onshore locations accounted for another 16.

The Benin Basin, Anambra Basin, Chad Basin and Benue Trough collectively attracted considerable attention, underscoring a willingness among investors to venture into territories that have remained largely unexplored despite years of geological studies and government interest.

According to the NUPRC, the process was conducted under clearly defined guidelines, while the Nigeria Extractive Industries Transparency Initiative (NEITI) monitored key stages of the exercise, including bid opening and evaluation procedures.

The commission maintained that technical competence, operational capability, proposed work programmes, financial commitments and performance guarantees all formed part of the criteria used to determine successful bidders.

That approach appears to have yielded another important outcome. Unlike previous exercises, the latest round concluded without the kind of controversy that has often overshadowed oil block allocations.

For years, frontier basins have occupied a curious position within the country’s energy landscape. Although successive administrations have highlighted their potential, investors have remained cautious because of concerns over infrastructure, commercial viability, security and the substantial costs associated with exploration.

For the commission, wider participation in frontier acreages offers an opportunity to diversify exploration activities, strengthen energy security, replace ageing reserves and spread investment across a broader geographical area.

According to projections by the commission, the newly awarded blocks could contribute about 500 million barrels to existing reserves, estimated at 37.01 billion barrels of crude oil and condensate, alongside 215.19 trillion cubic feet of gas.

Over the next three years, the commission believes the assets could support an additional 300,000 barrels of daily production, bringing the country’s ambition of producing three million barrels per day a step closer.

NUPRC insisted that companies must move quickly to fulfil all post-award obligations, including the payment of signature bonuses, submission of guarantees, payment of first-year rents and execution of contractual agreements.

The commission has also reaffirmed its commitment to enforcing its “drill or drop” policy, which is intended to prevent operators from holding on to assets without developing them. Under the arrangement, companies that fail to meet stipulated conditions within the prescribed period risk losing their allocations, thereby creating opportunities for reserve bidders.

Perhaps the greatest significance of the latest licensing round lies not in the number of licences awarded, the amount of money committed or even the geographical spread of the assets.

The larger question is whether the exercise has succeeded in strengthening confidence in the institutions responsible for managing one of the country’s most strategic industries.

The answer will not come from the conference hall, nor will it be found on the list of winning bidders. It will emerge from seismic surveys completed, wells drilled, investments made and, ultimately, barrels produced.

Only then will it become clear whether the scramble for oil blocks has truly moved beyond the Niger Delta or whether the country’s latest licensing exercise has merely opened another chapter in a familiar story.

Energy lawyer and partner at Bloomfield Law Practice, Dr Ayodele Oni, believes the latest exercise represents a considerable improvement on previous licensing rounds, although he argued that the true test would come in the years ahead.

According to him, the changes are evident in the design of the process, including the deployment of a digital portal, the publication of guidelines, the introduction of weighted scoring criteria and the decision to place greater emphasis on technical competence and work commitments.

He said: “The reduction of the signature bonus from a flat $10 million to a $3 million to $7 million band is the single most consequential change because it shifts selection away from those with the deepest pockets towards those capable of developing the acreage.”

While acknowledging the efforts of the NUPRC, Oni maintained that questions remain over aspects of the process that were not conducted in public view.

According to him, “The commercial stage was the most transparent Nigeria has conducted; the contested stage is the one nobody saw.”

He nevertheless maintained that the exercise substantially complied with the provisions of the PIA, noting that the commission was right to insist that the announcement of successful bidders did not amount to the final award of licences.

Oni also expressed support for the commission’s “drill or drop” policy, but warned that its success would depend on how consistently it is enforced.

“Its effectiveness depends entirely on two things the commission has not yet been tested on, namely enforcing the 90-day post-award deadline against a well-connected defaulter, and revoking rather than renegotiating when a licensee fails to drill,” he said.

In his view, the ultimate value of the exercise would not be determined by the estimated N353 billion expected from signature bonuses, but by the speed with which the new operators move from acquiring acreage to carrying out exploration activities and bringing new production on stream.

Energy expert, Prof. Dayo Ayoade, posited that the exercise aligned substantially with the provisions of the PIA, particularly in its emphasis on competition, clearly defined procedures and the use of technology.

According to Ayoade, the latest round represents a departure from the era of discretionary allocations, with bidders being required to demonstrate their financial and technical capabilities, as well as their environmental commitments.

However, he argued that while the procedures themselves appeared transparent, questions remained about how decisions were ultimately reached.

He said the publication of post-bid evaluation reports and scoring outcomes would strengthen confidence in the exercise and offer independent observers a clearer understanding of how successful bidders emerged.

He also questioned the extent of oversight by the Nigeria Extractive Industries Transparency Initiative (NEITI), adding that, “It’s 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 has to be seen to be real.”

Ayoade further cautioned against placing excessive expectations on the licensing round alone.

According to him, increasing production to three million barrels per day would require more than simply allocating new acreage.

He argued that the quicker route to increasing output might lie in reopening dormant fields and ensuring that capable operators gain access to assets.