NUPRC Clarifies Oil Block License Process, Denies Allegations of Mismanagement

• The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rejected claims of irregularities in the 2024 Oil Block Licensing Round, asserting that the process adhered to regulations and was transparent
• The Commission emphasised that eligibility for bidding is based on legal status, financial capability, and technical expertise, not company age, and that the bidding phases were conducted digitally with full transparency
• NUPRC also refuted reports of 40 oil block licenses expiring soon, clarifying that many of these licenses are in different stages of exploration, with applications for conversion to Petroleum Mining Leases under review

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Claims of irregularities in the 2024 Oil Block Licensing Round have been rejected by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which maintains that the procedure closely followed current rules and regulations.

In a statement released on Thursday, June 5, the NUPRC denied allegations made by an online newspaper that blocks were improperly distributed to firms with dubious eligibility and that violations of oil licensing rules had occurred.

According to Commission Chief Executive Gbenga Komolafe, the licensing cycle was carried out in complete accordance with the NUPRC's licensing regulations and the Petroleum Industry Act (PIA) of 2021. He characterised the bidding procedure as technologically advanced, competitive, and transparent.

In response to allegations that a newly registered business was given oil blocks, Komolafe stated that a company's age is not a factor in bidding eligibility. Rather, eligibility is based on legal status, financial capability, and technical proficiency.

“The technical and financial qualifications of a bidder are judged by the capacity and track record of its promoters or parent firms, not by when a company was registered,” he said.

He clarified that recently established Special Purpose Vehicles (SPVs) can engage in fair competition if they are supported by reputable and seasoned industry participants.

The 2024 licensing round consisted of three phases: pre-qualification, technical evaluation, and commercial bid evaluation. The applicants provided comprehensive documents, such as proof of operational experience, tax clearances, and incorporation papers.

“The pre-qualification window was open without restrictions on company age. The commercial bidding phase was conducted digitally using encrypted technology to ensure data integrity and confidentiality. Results were announced transparently during live televised sessions, observed by stakeholders, including the Nigeria Extractive Industries Transparency Initiative (NEITI) and relevant government ministries,” Komolafe added.

He pointed out that a clear, digital, point-based approach was employed to evaluate the commercial bids, assessing Work Performance Security, Proposed Work Program Financial Commitments, and Signature Bonus.

Reports that 40 oil block licenses are scheduled to expire on June 27, 2025, were also refuted by the NUPRC, which described the assertion as false and based on incorrectly interpreted data from the NUPRC website.

The 40 Petroleum Prospecting Licenses (PPLs) in question are in varying phases of exploration and development, the Commission explained. Under the PIA, numerous operators have submitted applications to convert their PPLs into Petroleum Mining Leases (PMLs); these applications are currently being reviewed by regulatory bodies.

The NUPRC added that a number of licensees are eligible for extensions since they have fulfilled the minimum work program requirements outlined in Section 78 of the PIA. It emphasized that there are other standards for compliance besides production start-up.

In accordance with regulatory rules, the Commission asked media outlets to guarantee truthful and contextual reporting. It restated its dedication to an open and inclusive regulatory framework that safeguards the public interest and promotes the long-term growth of Nigeria's gas and oil reserves.

40 Nigerian oil companies face licence expiry risk

Legit.ng reported that unless the Minister of Petroleum renews their licences in compliance with the Petroleum Industry Act, at least 40 business oil licences that are due to expire in June 2025 risk being lost.

The various licences granted to different businesses on 28 June 2022 will expire on 27 June 2025, according to the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) Upstream Concession Situation Report published in May.

These include petroleum exploration permits issued to oil corporations following the completion of the 2020 marginal fields bid round. According to the NUPRC, the law allows for an optional extension of three or five years; however, the length of the extension will depend on the company’s performance.

Source: Legit.ng