By Boluwatife Oshadiya| October 21, 2026
Key Points
- Contribute 20–30 per cent of project costs through equity to demonstrate financial commitment and improve prospects of securing loans
- Pool capital and obtain reliable technical data before approaching lenders, while considering existing wells as a potentially cheaper route to early production
- Establish clear investment structures, partner responsibilities and governance arrangements to manage risks in upstream petroleum development
Main Story
Bankers and energy-sector experts have urged holders of newly awarded petroleum licences to commit equity to exploration, saying personal investment, credible technical assessments and clear development plans can improve access to financing.
The advice was given on Tuesday at an onboarding workshop organised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Lagos. Akintade Thomas-Owoseni, Executive Principal at Standard Chartered Bank Nigeria, recommended that project sponsors contribute between 20 and 30 per cent of development costs through equity.
Thomas-Owoseni said financing unproven petroleum assets was difficult without existing cash flow. He explained that lenders were more likely to consider debt financing when operators could demonstrate financial commitment, present credible technical assessments and establish clear plans for developing and commercialising their assets.
Emeka Nkemakolam, Assistant General Manager and Head of Energy and Power at Fidelity Bank, said commercial banks were not structured to absorb the full risks of early-stage exploration. He noted that lengthy appraisal periods could leave operators paying interest for years before production generated revenue. He advised licence holders to pool resources, fund initial activities and secure reliable technical data before approaching lenders. Re-entering existing wells was another option he identified as potentially cheaper for achieving early production.
Tominiyi Owolabi, Managing Partner at Olaniwun Ajayi LP, stressed that investment structures should reflect project requirements and the capabilities of prospective partners. He warned that disagreements over decision-making, funding obligations and responsibilities could undermine partnerships.
“One of the biggest challenges is partner relationship, and it’s not solved by contracts,” Owolabi said.
Musa Usman, General Manager, Development, at TotalEnergies EP Nigeria, said financial resources and technical expertise alone could not guarantee success. He emphasised the need for partners with adequate financial capacity, technical competence and a shared understanding of risks and governance.
Valentine Ugbeide, Director and Board Member at Ingencia Energies, described a partnership in which five shareholders allocated work programme costs according to their equity interests, scheduled payments and used an operations committee to oversee decisions. The group adopted consensus rather than majority voting.
The workshop, themed “From Award to Production: Delivering Nigeria’s Upstream Petroleum Potential under the Petroleum Industry Act, 2021,” focused on the financial, technical and regulatory requirements for developing petroleum assets.
What’s Being Said
“Capital doesn’t guarantee anything. Technical excellence doesn’t guarantee anything,” said Musa Usman, General Manager, Development, TotalEnergies EP Nigeria Ltd.
Owolabi’s warning that partnership problems cannot be resolved by contracts alone underscored the importance of clear responsibilities, aligned expectations and effective governance. The supplied report contains no independent external assessment of the bankers’ recommendations.
What’s Next
- Licence holders will need to translate the workshop’s financing and governance guidance into project-specific development plans.
- The report does not specify a regulatory deadline or a subsequent NUPRC milestone arising from the workshop.
The Bottom Line:
Equity investment can strengthen a licence holder’s case for financing, but it does not remove the geological, commercial and operational risks of upstream development. The experts’ message is that credible project data, suitable partners and effective governance must complement funding if newly awarded assets are to progress towards production.
