The Federal Government has announced a decisive shift in its oil licensing framework, formally ending the longstanding practice of “speculative licensing” — a situation where firms acquire oil blocks but fail to explore or develop them. The new policy aims to revive Nigeria’s oil productivity and eliminate inactive oil fields.
This development coincides with a significant milestone announced by the Nigerian National Petroleum Company Limited (NNPCL), which confirmed that five of the country’s major crude evacuation pipelines have attained full operational capacity, recording 100 percent availability between May and June 2025.
The pipelines now fully functional are the Trans-Niger Pipeline, Oando Brass Pipeline, Trans Forcados Pipeline, Trans Escravos Pipeline, and the Trans Ramos Pipeline. These key arteries traverse the Niger Delta and are critical to transporting crude oil from inland production fields to offshore export terminals.
Despite these infrastructure victories, the NNPCL lamented Nigeria’s persistent inability to meet its 2025 daily oil production target of 2.02 million barrels, as stated in the national budget. Group Chief Executive Officer of NNPCL, Bayo Ojulari, noted that the root cause lies in years of underinvestment in the upstream oil sector.
“While we have overcome the long-standing bottlenecks in pipeline infrastructure, our national production still trails significantly behind potential. Last month, crude production averaged 1.35 million barrels per day, and with condensates, it reached 1.6 million bpd,” Ojulari said during the 24th Nigeria Oil and Gas Energy Week in Abuja.
The conference, themed “Accelerating Global Energy Progress Through Investment, Partnerships & Innovation,” attracted key stakeholders, regulators, and investors to reassess Nigeria’s energy trajectory.
Government to Enforce New Licensing Rules
Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, emphasized that oil field licenses would henceforth be granted only to operators with proven technical and financial capability.
“We will no longer allow Nigeria’s hydrocarbon assets to be controlled by entities that neither develop them nor add value. Any company using licenses as leverage for financing without development action will lose those licenses,” Lokpobiri said.
He added that the Federal Government is reassessing all current oil block holders to ensure alignment with national economic and energy security goals.
The Minister also revealed that a consultant from the Oil Producers Trade Section (OPTS) has been engaged to work alongside the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to reform Nigeria’s fee structure for oil and gas operators. Nigeria currently has 273 different fees, which many stakeholders have decried as excessive and anti-investment.
“We’re harmonising Nigeria’s fee system with global standards. No serious investor will enter a market where fees are arbitrary and unpredictable,” Lokpobiri explained.
Investment Needed to Maximize Infrastructure Gains
Ojulari called on both local and international investors to take advantage of the improved security across the country’s oil pipeline network. He also highlighted progress in the ongoing $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline, noting that contractors had successfully crossed the River Niger, a historically difficult segment.
“We’ve resolved the infrastructure challenge. Now, we must aggressively attract new capital to maximize returns and raise production,” Ojulari stated. “The stars are beginning to align, and this is the time to act.”
Gas Sector Holds Untapped Potential
Also speaking at the conference, Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, stressed that Nigeria’s gas sector remains a largely untapped asset. With over 200 trillion cubic feet of proven natural gas reserves, Ekpo said the country is focused on converting these resources into economic value through the Decade of Gas initiative.
This initiative targets broad economic transformation through increased domestic LPG use, industrialization, expanded power generation, gas-to-transport programs, and boosted gas exports.
“Gas must become a tool for economic empowerment. We are working to move from potential to performance,” Ekpo concluded.
Strategic Shift for a Competitive Future
The new strategic direction from the Nigerian government signals a more disciplined and investment-friendly approach in the oil and gas sector. With pipelines now fully operational, attention turns to regulatory clarity, increased capital inflow, and strict enforcement of development obligations tied to licenses.
If successfully implemented, these reforms could help Nigeria reclaim its position as a top-tier oil producer and secure long-term energy and economic stability.
