Renewed impetus has been observed within the Nigerian petroleum industry following the Petroleum Industry Act of 2021. The Act aimed to transform Africa’s largest oil producer into a more transparent, competitive and sustainable energy hub, firmly backed up by President Tinubu. By making the licensing process clear and transparent, expediting approvals for projects and having a clear and predictable tax system it is hoped to encourage investment into the country. This mindset shift came across clearly in several talks at AEW this year.
The 2025 Nigerian licensing round, which commences today, Monday 1st December, furthers this desire to move the petroleum industry forward in Nigeria. The emphasis is on optimising near term production and accelerating energy transition goals with undeveloped discoveries, fallow fields and gas rich fields being included. The round includes 15 onshore blocks, 19 in shallow water, 15 frontier assets and 1 deep water block. To accelerate deep and shallow water projects, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has introduced a cluster development model encouraging operators of nearby fields to share platforms, pipelines and facilities.
NUPRC Commission Chief Executive Eng. Gbenga Komolafe has confirmed that the licensing round process will follow a two-stage model, starting with a technical evaluation before progressing to commercial bids for qualified applicants. The target being to increase capacity by one million barrels a day through local and international investment.
So, what can applicants gain by participating in this round? Well, the past 10-15 years clearly demonstrates the value, as there has been (in our opinion) a revolution in the O&G scene in Nigeria, with production from independents now outstripping that of IOCs. Many of the independents are indigenous Nigerian companies who have built enviable portfolios from a base of marginal field allocations. Seplat is one such indigenous Nigerian company, and the fireside chat with its CEO Roger Brown at AEW25 explained how the company had grown since acquiring assets from Shell in 2010, bringing structure and fiscal discipline. They also benefitted from the smart acquisition of acreage from ExxonMobil in 2024. Similar compelling growth stories were told by Tony Attah, the MD/CEO of Rennaissance Africa Energy Company Ltd, and Akinbambo Ibidapo-Obe, GM Commercial of OANDO. As Oladimeji Bashorun, the COO of Energia Ltd, put it,
“You wouldn’t believe how many opportunities had been overlooked”.
That’s the key. Looking away from the marginal fields (and beneath) to unlock the hidden potential. Indeed, Tony Attah, reminded the AEW25 audience that 600 TCF of gas potential is available to explore for in Nigeria. If that is correct, and with gas being so bankable as a transition fuel, enormous value is ready to be realised for the ambitious explorer.
How is the value being unlocked? Well, here are some themes:
New motivations – Majors of old sought ‘big cat’ targets and screened out the ‘small’ opportunities. The same ‘small’ opportunities are company-makers for nimble operators today, with local refining capabilities available and a much larger domestic market.
New eyes – E&P science has moved on. We can now leverage learnings from similar settings around the world to see the full picture and identify opportunities.
New technology – Technology is moving quickly. The application of emerging methodologies can unlock the potential of old data and illuminate the prize.
Data curation – Sounds boring, but many assets come with an incomplete or disorganised database. It takes experience to recognise the gems of critical data which can save millions in CAPEX and maximise value.
Experience – As Layi Fatona said at AEW25, “Brownfields need grey hair”. That is both the inherited experience from decades working the asset, but also global technical experience.
Community engagement – Many of the new breed of Nigerian operators have shown how community engagement can drive infrastructure security and production growth from day one. It demonstrates the value of the local content requirements which encourage upskilling of the indigenous work force.
In Merlin’s view, Nigeria looks set to be the vanguard of the wave of new energy in Africa, and this licensing round is the next big step. Merlin has been supporting its clients to deliver value from stranded assets for decades through the intelligent application of geoscience and is proud to support the new breed of Nigerian operators. Merlin’s mission is to help accelerate the growth of companies and the technical knowhow of local staff, who are the future. Merlin can work with you during the licensing round to assess and identify optimal target opportunities so do please reach out and see how we can work with you on your growth journey.
