By the third quarter of this year, Nigeria will formally open its 2026 oil licensing round, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced.

The announcement on Wednesday following ministerial approval, underscores a strategic shift by the federal government toward running back-to-back licensing rounds.

According to Mrs. Oritsemeyiwa Eyesan, Chief Executive of the NUPRC, the commercial bid phase of the current 2025 licensing round will take place in July. The 2026 round is scheduled to commence shortly thereafter.

“Eyesan said ​rising investment ​and ⁠oil output pointed to a more attractive sector ​after recent policy moves to ​stabilise ⁠operations and draw in capital.”

Lowering Barriers to Entry

According to the NUPRC in its 2025 licensing round portal, to incentivise international and local investors, Nigeria has adjusted its regulatory strategy by lowering entry barriers for its recent oil rounds. Under the sweeping reforms of the Petroleum Industry Act (PIA) of 2021, the NUPRC is prioritising a more business-friendly framework to address historical funding constraints.

These adjustments come at a critical time. International oil majors have spent the last few years divesting from onshore assets due to regulatory uncertainty, pipeline vandalism, and security challenges, shifting their focus toward deep offshore projects.

By offering transparent, data-driven bid rounds and lowering financial hurdles, Nigeria hopes to institutionalise regular, predictable opportunities for global capital.

The Current Realities Facing Nigeria’s Oil Sector

While the regulatory push for back-to-back licensing rounds signals administrative efficiency, the aggressive expansion faces a complex mix of domestic macroeconomic factors and operational bottlenecks.

Rebounding Output vs. Fiscal Benchmarks

NUPRC leadership pointed to a stabilizing upstream sector, citing rising investments and an upswing in production. Data indicates that Nigeria’s daily oil production rose to roughly 1.54 million barrels per day (mbpd) by late March 2026.

However, this recovery remains a double-edged sword:

Major operators, including Meren Energy, have expressed renewed interest, citing the attractiveness of world-class assets like the Agbami, Akpo, and Egina fields.

The Local Refining and Pricing Friction

A major contemporary challenge for any incoming investor is navigating Nigeria’s evolving domestic market. The operationalization of massive domestic mega-refineries, such as the Dangote Refinery, has shifted national priorities toward the Domestic Crude Supply Obligation (DCSO).

Recent regulatory reports from Q1 2026 highlight a persistent friction point: while producers offered 68.7 million barrels to local refiners, actual deliveries hovered around 28.5 million barrels. This massive shortfall is driven by ongoing pricing disputes between international oil producers and local refiners.

The NUPRC has emphasised that these transactions must operate on a “willing buyer, willing seller” basis. For incoming investors eyeing the 2026 round, balancing highly profitable export markets with legally mandated domestic supply obligations will be a core operational variable.

ESG and Infrastructure Deficits

The NUPRC has noted that future licensing will increasingly weigh Environmental, Social, and Governance (ESG) criteria, requiring operators to submit stringent Field Development Plans focused on gas utilisation and ending gas flaring.

However, the infrastructure to process and evacuate gas remains underdeveloped. New investors will not just be buying oil blocks; they will inherit the burden of building midstream infrastructure in an inflation-heavy economy.

The back-to-back bid rounds demonstrate that Nigeria is no longer letting asset opportunities sit dormant. By cutting red tape, the NUPRC is doing its part to make the market attractive.

However, the ultimate success of the 2026 licensing round will depend on whether the government can bridge the gap between regulatory optimism and the harsh realities of crude theft, aging infrastructure, and domestic pricing disputes.

Reporting by Theresa Igata