The minister of state for Petroleum Resources (Oil), Heineken Lokpobiri, has warned prospective investors in the 2025 oil and gas licensing round that the federal government will not entertain refunds or tolerate idle assets, even as it steps up efforts to attract more capital into the upstream sector.
Speaking at the 2025 licensing round pre-bid conference organised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Lagos on Wednesday, Lokpobiri said Nigeria now accounts for over 60 percent of Final Investment Decisions (FIDs) in Africa, a feat he credited to President Bola Tinubu’s reforms and a deliberate push to restore investor confidence.
He stressed that licences would only go to bidders ready and able to develop the assets, adding that the era of treating oil blocks as speculative “status symbols” is over and that the Petroleum Industry Act (PIA) does not provide for asset swaps or refunds once bids are concluded.
According to him, Nigeria has become a viable destination for investments in the oil and gas sector in the last 2 years. “Everywhere I go to, everybody wants to come to Nigeria and I’ve been working very closely with the NUPRC and the other regulators to say, look, we are going to be judged by the number of businesses we enable, not by the number of regulations that we bring out.
“And I’m very happy that over the last two years, this industry has grown so much in terms of confidence, so much in terms of investment, to an extent that the number of FIDs in Africa, Nigeria has taken practically two-thirds of them and this didn’t come by accident, it is by deliberate partnership, deliberate work that we’ve done over the last two years,” the minister said.
Lokpobiri said that the bidding process had a robust programme which reflects shared commitment to transparency, efficiency, and accountability in Nigeria’s upstream sector, adding that the upcoming licensing round represents a clear opportunity for investors and operators to participate in Nigeria’s petroleum industry.
He however cautioned investors to desist from participating in the licensing round if they were not willing or ready to develop the assets. He decried past happenings where people obtain license with no capacity or intention to develop them.
“Some of them have even been held for speculation, let me keep them, one day somebody will come and I’ll be able to get a fortune out of it. That era, as I said earlier, is gone.
“Let me make it clear from the beginning that, look, these assets should not be taken as mere symbols, status symbols. What I’ve discovered in my over two years as minister is that some people have had licenses for 20 years and they are very proud going around the world with their nicer suits and say, look, I have a licence that add no value to their lives and to the Nigerian economy.
“The licences belong to the federal government of Nigeria. We give you a license to operate within a given time frame, so it doesn’t belong to you automatically. But even if you have it and you haven’t done anything, what value have you added to yourself? You ended up wasting your money, and then fooling yourself around the world, saying that I have a licence and seeking for investors that would never come. Investors will come based on clear parameters. The investor will not come because you wear a nice suit.
“So I want to say from the beginning that, look, these 2025 licences shouldn’t be status symbols for people to say, I have a licence. No, that era should be gone and gone forever in Nigeria,” he said.
He maintained that the bidding process would be anchored in the provisions of the Petroleum Industry Act which states that the petroleum prospecting licenses, (PPLs) and then petroleum mining leases (PMLs) shall only be granted through a fair, transparent, and competitive bidding process and the licensing round guidelines issued by the NUPRC.
He explained that so far, the NUPRC had complied with all the extant provisions of the PIA, which are conditions presented to issuers of licences. He added that the provisions of the PIA existed to promote certainty, remove discretion on the part of politicians, and attract serious, capable investors into the sector.
Speaking further, Lokpobiri emphasised that the PIA does not provide for assets exchanges or refunds after bidding process. He explained that once a bid is completed and an award is made in accordance with the law, the commercial and technical risk lie with the people who chose to bid for those assets.
“Government, under any law, has no obligation to refund your bidding fee or your signature bonus because you found out that eventually you didn’t see oil, you only found gas. Government has no obligation, government didn’t pick those assets for you. You picked them based on the data you procured and you bid for them.
“This is why precisely this pre-bid conference is fundamental so that everybody is educated about how this thing is done. It is designed to ensure that all prospective bidders fully understand the assets on the bidding table, the available data and the applicable law and the risk that could be involved if you choose to bid for any asset.
“Accordingly, as government, it is important for me to say that government will not be providing refunds or exchanges, for any assets following this bid round. This position is not driven by any discretion. It is driven by law. The law doesn’t allow government to refund any of these things, ” he added.
SOURCE: LEADERSHIP NEWS PAPER
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