A significant shift is taking place in Nigeria’s upstream oil and gas sector where indigenous energy companies are increasingly entering the field and positioning themselves to compete on a larger scale. Local oil companies (LOCs) are acquiring assets divested by International Oil Companies (IOCs) while emerging firms are successfully securing blocs in marginal fields and shallow waters.
The past year has been particularly noteworthy, marked by the completion of major divestment deals and conclusion of the 2024 bid round. A new era seems to have begun with new entrants in the industry securing lucrative oil wells during the just concluded 2024 bid round, a process overseen by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and marked by transparency. This was the first bid round since the enactment of the Petroleum Industry Act (PIA) in August 2021 and the first fully supervised by the Commission. Engr. Gbenga Komolafe, the Commission Chief Executive (CCE), described the moment as pivotal: ‘This Licensing Round (2024) is not merely a commercial exercise; it is a bold declaration that Nigeria is ready for business.’ Chapter 4 of the PIA supports indigenous oil companies in Nigeria’s upstream sector. It stipulates provisions for marginal fields. These fields, defined as dormant or categorised as marginal before January 1, 2021, are convertible to Petroleum Prospecting Licenses (PPLs), allowing indigenous firms to benefit from favourable terms. Such fields must have been discovered but left untapped for at least ten years from the initial discovery date. The PIA also prioritises local content and transparency, creating a more conducive environment for indigenous participation. It was the cornerstone of the 2024 Licensing Round as it introduced several attractive fiscal regimes designed to stimulate investmen