By Akin Monehin

The answer may not be known on the day the blocks are awarded.

The recent conclusion of Nigeria’s 2025 Licensing Round marks another important milestone in the country’s upstream petroleum sector. Following a competitive process involving 143 participating companies and approximately 200 commercial bids, 31 companies emerged successful across 37 petroleum blocks, reaffirming that Nigeria’s resource base continues to attract investor interest across both established and frontier basins. The successful companies deserve congratulations on securing the opportunity.

Equally, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) deserves recognition for conducting a licensing process that reflects the Petroleum Industry Act’s emphasis on transparency, competition and investor confidence.

More importantly, it reflects the direction established by the Petroleum Industry Act, which sought not merely to modernise the governance of the upstream sector, but to create a more transparent, competitive and investment-oriented licensing framework capable of unlocking long-term value from the nation’s petroleum resources. That evolution matters because confidence in the licensing process is itself a strategic national asset.

Yet there is another question that deserves equal attention; awarding petroleum opportunities and building successful operators after achieving first hydrocarbon are not the same achievement. A licence creates possibilities. It does not, by itself, create production.

As Nigeria pursues her ambitious crude oil production target of three million barrels per day by 2030, the ultimate measure of success will extend beyond the quality of the licensing process to the quality of the operating businesses that emerge from it. New licences create opportunities. Only successful execution converts those opportunities into producing assets, government revenue, investor confidence, indigenous capability and long-term energy security.

Viewed individually, these are commercial outcomes. However, collectively, they become matters of national competitiveness. Perhaps Nigeria’s next chapter in upstream development will depend less on the opportunities it continues to award than on something we have spent far less time discussing. That is the conversation worth having.

If this challenge appeared only occasionally, it could reasonably be dismissed as the normal commercial risk of petroleum exploration. Nigeria’s upstream history suggests otherwise; across successive licensing rounds, changing governments, different ownership structures and evolving regulatory frameworks, a remarkably consistent pattern has emerged. Winning access to petroleum assets has repeatedly proved easier than converting those assets into sustained production and enduring enterprise value.

The earliest marginal-field programme provides the clearest long-term benchmark. Between 2003 and 2004, 24 marginal fields were awarded to 31 operators. A decade later, only nine of those fields, approximately 38 per cent, had reached production. Put differently, more than six out of every ten awarded fields had still not become producing assets after ten years.

What makes that experience particularly instructive is the regulator’s own assessment of why. The principal constraints extended well beyond geology and reservoir quality. They included inadequate infrastructure, insecurity, community-related challenges, partnership disputes, contracting and procurement difficulties, and technology deployment. Taken together, these pointed to challenges that were as organisational as they were technical.

The pattern was not confined to the marginal-field programme. It also featured in the findings of the Petroleum Revenue Special Task Force (PRSTF), chaired by Mallam Nuhu Ribadu, which reviewed the outcomes of the 2005, 2006 and 2007 licensing rounds and identified a similar challenge in converting awarded opportunities into productive development.

The more recent licensing rounds conducted under the Petroleum Industry Act are still too early in their lifecycle to judge by comparable production outcomes. Yet the Act itself, and the NUPRC’s implementation of its “drill or drop” provisions, reflects an important institutional shift: awarded petroleum assets are expected to progress purposefully towards exploration, development and production, rather than remain undeveloped indefinitely.

The evidence, accumulated over more than two decades, points towards the same conclusion: the more enduring challenge has rarely been awarding petroleum opportunities, rather, it has been consistently transforming them into producing, sustainable operating businesses.

Perhaps the way we have traditionally framed this challenge is too narrow; we often speak about licensing success, investment attraction or field development as though they are separate conversations. In reality, they are different stages of the same journey because the moment a licence is awarded, the question quietly changes. It is no longer simply whether a company possesses technical competence or financial capacity. Increasingly, it becomes whether it can build an organisation capable of sustaining progress from exploration to first hydrocarbons … and beyond.

The question changes the moment a licence is awarded. From that day forward, the challenge is no longer winning petroleum opportunities—it is building an organisation capable of realising them

I have come to think of this transition as the Licence-to-First Hydrocarbon Gap™.

It describes the often-overlooked distance between acquiring a petroleum opportunity and consistently converting that opportunity into safe, reliable and commercially sustainable production. That distance is rarely measured in kilometres or barrels. More often, it is measured in organisational capability; in the ability to align partners, mobilise capital, coordinate contractors, navigate communities, deliver contracts, strengthen governance, maintain operational discipline and keep momentum through years of uncertainty and complexity.

Seen through this lens, the licence is not the finish line, but the starting point.

Perhaps this helps explain why organisations with similar assets, comparable technical expertise and access to capital can ultimately produce very different outcomes. The distinguishing factor may lie less in the opportunities they acquire than in the organisations they build to realise them.
Leadership reflection

The lesson extends well beyond petroleum.

Issuance of licences to indigenous firms is the right move, however, nations do not transform simply because they make better decisions. They transform because they build institutions capable of converting those good decisions into consistent results. The same principle applies whether the challenge is petroleum development, infrastructure delivery, research, manufacturing, healthcare or public sector reform. Announcements create possibilities. Institutions create outcomes via disciplined execution.

Perhaps this is why some countries consistently translate opportunity into prosperity while others repeatedly struggle despite abundant resources and capable people. The difference is often less about ambition than about the organisational capability to sustain progress long after the initial excitement has passed.

Winning a petroleum licence is, therefore, an important milestone, not just for the winners, or the regulator, NUPRC, but also for the nation. However, becoming a successful operator is a different discipline altogether. One reflects confidence in future potential. The other determines whether that potential is ultimately realised.

Monehin is founder of Praxis Execution Advisory and author of the bestselling book Execution Is a Lie. He has led business transformation across the aviation and oil and gas industries, including at Shell, with experience spanning 10 countries.

As Nigeria pursues its ambitions for greater production, stronger indigenous participation and increased energy security, the conversation may gradually need to evolve. The question is no longer only how we award petroleum opportunities, but how we consistently build organisations capable of transforming those opportunities into enduring national value.

A question worth leaving with
If two companies receive comparable petroleum assets, similar access to capital and equally capable technical teams, what ultimately determines which one becomes a successful operator?

The answer may reveal that Nigeria’s greatest upstream opportunity is no longer beneath the ground, but within the organisations entrusted to develop it.