Nigeria is opening a new front in its battle to revive waning oil profits and restore investor confidence in its upstream sector, as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced that the country will begin its next oil licensing round on December 1, 2025.
The move signals a renewed push to attract exploration dollars at a time when government profit from crude sales is shrinking despite a surge in total oil receipts.
The announcement was made in London on Tuesday by Gbenga Komolafe, commission chief executive of the NUPRC, during the regulator’s Project 1MMBOPD Additional Production Investment Forum.
The event brought together CEOs of international oil companies (IOCs), financiers including Bank of America, and prospective upstream investors as Nigeria pitched new reforms and production opportunities.
Komolafe said the licensing round, approved by President Bola Ahmed Tinubu in his capacity as Minister of Petroleum Resources, was consistent with the Petroleum Industry Act (PIA), the framework expected to ensure transparency and competitiveness in allocating exploration acreage.
“We are announcing that we are ready, following the approval of the Minister of Petroleum Resources in line with the Petroleum Industry Act, to commence the 2025 licensing round beginning from December 1, 2025,” he said.
According to Komolafe, the forum was designed to eliminate the culture of “silos” in project development by linking exploration and development companies directly with financiers and service providers.
He acknowledged that funding remained Nigeria’s biggest barrier to upstream expansion and said the Commission now sees its role not just as a regulator but as an enabler and investment connector.
“One of the factors that affected business is that activities were happening in silos, but the NUPRC now realises the need to bring everyone together. We want you all to network. Bank of America is here as well as representatives of other banks,” he told participants. Komolafe said reforms under the Tinubu administration had already improved economic and operational metrics in the upstream industry.
He disclosed that crude production had risen to an average of 1.71 million barrels of oil per day (BOPD) with a recent peak of 1.83 million BOPD, a signal, he said, that the system was responding to improved monitoring, community engagement and investments in evacuation infrastructure.
He added that 46 Field Development Plans (FDPs) had been approved between January 2025 and now, commitments he described as “immediate investments” that will translate into new wells, facilities, and incremental barrels in the near term.
Rig count has risen to over 60, he said, with at least 40 rigs currently active, one of the highest levels in a decade.
For Komolafe, this is the strongest signal to existing and prospective investors that the timing is right to deepen engagement.
“The drive to reach and sustain one million barrels per day in incremental capacity and beyond will require Floating Production, Storage and Offloading units; Floating Storage and Offloading vessels; and a variety of modular offshore production units and early production facilities. All these need investments, and the prospects are here in Nigeria,” he said.
Voices from the global oil community echoed NUPRC’s message. Ademola Adeyemi Bero, chairman of the Governing Board of the Organisation of Petroleum Exporting Countries (OPEC), urged investors to seize the opportunity offered by Project 1MMBOPD, noting that the petroleum sector remains critical to President Tinubu’s target of building a $1 trillion economy within the decade.
On the policy front, lawmakers reassured investors that Nigeria would not tinker arbitrarily with the PIA, a concern that had undermined investor confidence during previous reform cycles. Alhassan Ado Doguwa, chair of the House Committee on Petroleum Resources (Upstream), said Parliament would not pass legislation that creates uncertainty for capital.
“The House of Representatives reaffirms its commitment to the PIA and will resist any arbitrary changes that will undermine investments,” Doguwa said.
His Senate counterpart, Eteng Williams, reinforced the message, promising that the legislature would continue to support laws that protect capital and accelerate project development.
Oil profits collapse despite booming revenue
Fresh data from the Budget Implementation Report for Q4 2024 highlight the urgency driving the new licensing round.
Nigeria’s gross profit from crude oil and gas sales fell by N824.66 billion in 2024, dropping to N1.08 trillion from N1.90 trillion in 2023, a decline of 43.32 percent year-on-year.
The figure also missed the Federal Government’s target of N1.46 trillion by more than N385 billion, revealing that the government is earning less pure profit from each barrel produced.
More telling is how insignificant gross profit has become relative to total oil receipts. Nigeria generated N15.07 trillion in oil and gas revenue before deductions last year, a dramatic rise from N8.36 trillion in 2023.
Yet only 7.2 percent of that figure represented profit, compared with nearly 23 percent the previous year. In effect, Nigeria is generating more naira from oil but keeping less of it.
Quarterly performance shows how fragile the margin is. Gross profit started the year at N365.22 billion, plunged to N161.49 billion in the second quarter, recovered to N216.58 billion in Q3 and ended at N335.69 billion in Q4. None of the quarters met the budget benchmark of N366.09 billion.
Analysts familiar with the data say the decline reflects higher operating costs, expensive offshore developments, legacy cash call obligations, and the structure of joint-venture and production-sharing contracts that leave government with disproportionately smaller returns.
At the same time, other revenue lines from the upstream sector were booming. Petroleum profit tax doubled to N6 trillion. Royalties surged almost threefold to N6.99 trillion. Foreign exchange gains, which rose as the naira weakened post-FX reform—jumped more than fourfold to N4.24 trillion. Gas flaring penalties and incidental royalties also saw substantial increases.
Total deductions fell sharply, boosting net oil revenue to N12.95 trillion, up from N4.82 trillion in 2023. But much of the gain was due to accounting treatments and FX valuation, not operational efficiency.
Experts said this imbalance explains the urgency behind the new licensing round: Nigeria needs more oil production, not just higher oil prices or better compliance, to improve actual profit.
The government’s target of adding one million barrels per day in incremental production hinges heavily on discoveries, field developments and faster project approvals. NUPRC is positioning the December auction as the starting gun for that race.
With global capital increasingly shifting toward cleaner energy, Nigeria faces a shrinking window to monetise reserves. The country remains Africa’s largest holder of oil and gas but has fallen behind rivals in exploration licensing and project sanctioning.