Uche Cecil Izuora
Energy expert Adeo Adifou, and a partner at Ounjiri and Adefulu, has observed that Nigeria has moved from long gaps between oil bid rounds to a more predictable sequence that has included the 2022 and 2023 mini-bid rounds, the 2024 licensing round, the 2025 round and now the prospective 2026 exercise.
The field auction sustenance he said is capable of delivering volumes to meet the country’s target production.
Nigeria is ramping up preparations for its 2026 oil and gas licensing round, with authorities aiming for full acquisition of the assets on offer in what would mark another step in the country’s effort to accelerate upstream investment under the Petroleum Industry Act.
The planned round is expected to begin in the third quarter of this year and run through the end of the first quarter of 2027, according to comments in the interview. The push comes as the Nigerian Upstream Petroleum Regulatory Commission, or NUPRC, has already issued 19 petroleum prospecting licenses to 12 successful bidders from the 2024 licensing round, underscoring a faster pace of bid cycles since the PIA came into force.
Speaking in the interview, with CNBC, Adifou, said one of the clearest changes in Nigeria’s upstream market since 2021 has been the improved regularity of licensing exercises.
“Since 2021 when the PIA was started, clearly what we’ve seen is an improvement in cadence in licensing rounds,”.
That increased cadence is significant for investors and policymakers alike. For Nigeria, the government’s objective is not simply to hold more rounds, but to use them as a lever to raise exploration activity, replenish reserves and ultimately support a longer-term ambition to increase crude output toward 2 million barrels per day. For investors, more frequent rounds create greater visibility and a clearer signal that the regulatory framework is becoming more structured.
Still, Adifou cautioned that the true success of a licensing round should not be measured solely by immediate revenue such as signature bonuses. While upfront payments can provide a short-term fiscal boost, he argued that the more meaningful benchmark is whether awarded blocks are eventually explored, developed and converted into production.
“One measure of success is how much did we make in the signature bonuses. That’s a very short-term measure of success,” he said. “Long-term measure of success is really how many of these licenses convert to production, which ultimately brings money into the Nigerian treasury.”
That distinction is especially relevant as questions persist over whether some previously awarded assets have progressed quickly enough into active work programs. In the interview, concerns were raised that some winning companies in earlier rounds may have secured acreage without advancing drilling or exploration activity at the expected pace.
Adifou said it is still too early to judge the post-2021 rounds by production outcomes because many of the licenses remain in early-stage consolidation and exploration. But he stressed that the regulator must closely enforce obligations laid out under the PIA and act when license holders fail to meet them.
According to him, the NUPRC needs to continue monitoring compliance and, where bidders are unable to fulfill their commitments when due, ensure that such licenses are withdrawn. That enforcement mechanism, he suggested, is critical if Nigeria wants licensing rounds to translate into tangible output growth rather than dormant acreage holdings.
The interview also highlighted a broader challenge facing Nigeria’s upstream ambitions: the pace of project execution. Even as the government seeks faster results, Adifou said the journey from license award to field activity is inherently lengthy. Exploration requires capital, equipment, technical know-how and access to a functioning service ecosystem.
“It does take time,” he said. “It takes time from the award of the licenses to actually get your people on the field to start the work of exploration.”
Beyond the natural timeline of upstream development, Nigeria must also contend with capacity issues in the oilfield services market. Adifou pointed to ongoing questions about whether major international service providers remain as active in Nigeria as before, amid shifts in market dynamics and the growing emphasis on domestic participation under the Nigerian Content Act.
That transition toward local content has helped create more room for Nigerian oil and gas companies and service providers, particularly as international oil companies divest onshore and shallow-water assets. But it has also raised practical questions over whether domestic players currently have enough material resources, financing and technical capacity to execute at the speed required.
The government, he said, is already engaging with service providers and the Nigerian Content Development and Monitoring Board to identify priority gaps. The implication is that a successful 2026 round may depend not only on investor appetite for acreage, but also on whether the broader support chain can sustain new exploration and development activity.
Gas development emerged as another major theme in the discussion, reflecting the country’s wider energy strategy. Although Nigeria holds substantial gas reserves, it continues to face difficulty meeting domestic market needs consistently. Adifou said the PIA attempted to address this through provisions covering domestic gas development obligations and pricing, but implementation remains crucial.
A key issue is whether gas producers are sufficiently incentivized to bring supply to market. Adifou referenced the long-running debate over a willing buyer, willing seller pricing framework, arguing that competitive pricing is essential if upstream producers are to commit capital to domestic gas projects.
At the same time, pricing alone is not enough. Infrastructure remains a central bottleneck. Pipeline development, including references in the interview to major transport links, is necessary to move gas from producing areas to consumers across the country. Without that network, Nigeria’s large reserve base cannot fully translate into reliable industrial and power-sector supply.
As geopolitical tensions in the Middle East continue to sharpen focus on energy security and supply diversification, the interview suggested Nigeria has an opportunity to position itself as a more important supplier both regionally and globally. But that opportunity will depend on what Adifou described as “velocity” — the speed at which regulation, financing, infrastructure and technical execution can align.
He said Nigeria remains strongly positioned within Africa, but added that more work is needed to lower regulatory barriers, mobilize financing and clarify whether infrastructure development should be led primarily by the government or the private sector.
For now, the outlook for the 2026 licensing round appears constructive. A more regular bid calendar, stronger regulatory follow-up and continued investor interest could help Nigeria build momentum. Yet the country’s bigger test will be whether it can move from awarding licenses to delivering exploration, production and gas supply at the scale needed to support fiscal stability and energy security.
If Nigeria can make that transition, the 2026 round may prove to be more than another auction cycle — it could become a measure of whether post-PIA reform is finally translating into barrels, molecules and bankable growth.