Nigeria’s 3m bpd Oil Goal: Will New Block Licensing Deliver?

As regulators award new acreage under the Petroleum Industry Act, questions remain over whether infrastructure, investment, and operational realities can deliver on the ambitious 2030 output targets.
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The 3-Million-BPD Ambition

For decades, achieving a three-million-barrel-per-day (bpd) target has seemingly remained elusive in Nigeria’s oil sector as the country’s production has been hindered by years of pipeline vandalism, underinvestment, regulatory uncertainty, and the exit of International Oil Companies (IOCs) from onshore assets.

Now, the Federal Government has placed that ambitious target back at the centre of its national economic strategy.

Leading the charge to actualise it is the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which recently concluded its 2025 Licensing Round, awarding 37 oil and gas blocks to 31 indigenous companies who emerged as winners of bids.

The bidding process was reportedly automated and market-driven, in line with provisions of the Petroleum Industry Act (PIA).

Speaking during the commercial bid conference in Abuja on Tuesday, July 21, the NUPRC Commission Chief Executive, Mrs. Oritsemeyiwa Eyesan, disclosed that the newly awarded assets could add up to 500 million barrels to Nigeria’s existing crude reserves of 37.01 billion barrels and unlock an estimated 300,000 bpd in new output over the next three years alone.

NUPRC offered 50 oil and gas blocks spread across diverse terrains, including 16 onshore blocks in the Niger Delta, 18 shallow water blocks, one deep offshore block, three onshore blocks in the Benin Basin, four in the Anambra Basin, four in the Chad Basin and four in the Benue Trough.

Pinnacle Daily reports that the 2025 Licensing Round attracted interest from 300 companies. By the submission deadline, 143 companies had submitted 200 technical and commercial bids covering 37 assets. This means 13 oil blocks, mostly in the frontier basins, were not bided by investors.

Eyesan emphasised that the 2025 Licensing Round is a significant step towards achieving the 2030 oil production target.

For Nigeria, whose economy still depends heavily on oil earnings for foreign exchange and government revenue, increasing production has become an economic imperative rather than merely an industry aspiration.

However, behind the optimism, industry experts and analysts have raised a critical question: can licensing more oil blocks alone deliver the production surge needed to reach three million barrels per day?

From Bidding to Barrels: The Execution Challenge

NUPRC had emphasised that the 2025 Licensing Round was different from previous exercises, where long intervals between bid rounds and opaque decision-making often deterred long-term investment.

Eyesan stated in her remarks that the commercial bid opening procedure was observed by the Nigeria Extractive Industries Transparency Initiative (NEITI) and other stakeholders, signalling an institutional shift.

While the transparent execution of the bid round earned commendation across the energy sector, regulators and technical experts agree that holding a licence is merely step zero.

As the industry experts converge in Lagos for the 49th Nigeria Annual International Conference and Exhibition (NAICE 2026), the Society of Petroleum Engineers (SPE) has stated that licensing alone is merely a starting point and called on the federal government and the new oil and gas block awardees to translate the 37 assets into economic opportunities for the country.

While speaking at the pre-event Press Conference to flag off activities for NAICE 2026 scheduled for August 3–5 at the Expo Centre, Eko Hotel & Suites, SPE Nigeria Council Chairman, Engr. Francis Nwaochei said Nigeria’s path to achieving the 3 million barrels per day target by 2030 now depends on how far the operators can go in converting newly awarded assets into producing crude oil volumes, mobilizing alternative capital, and securing oil and gas infrastructure.

“Awarding blocks is only the catalyst. Converting exploration licences into daily producing volumes requires rapid technology deployment, reservoir precision, and disciplined capital mobilisation,” Engr. Nwaochei warned.

The SPE’s message was clear: the country must now back its ambitious acreage awards with rapid investment and field development, or risk the 3 million bpd target remaining elusive.
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The “Drill or Drop” Principle

​Meanwhile, the NUPRC warned the winners of the oil and gas assets that failure to develop them within 90 days after the commercial bid could lead to forfeiture.

​Pinnacle Daily reports that the PIA explicitly makes a provision tagged “drill or drop”, which is designed to eliminate paper speculation and ensure licence holders move rapidly toward field development. Under current guidelines, winning bidders must satisfy stringent post-bid obligations—including signature bonuses, first-year rents, and performance guarantees—before Petroleum Prospecting Licences (PPLs) are formally issued.

Earlier in the year, during pre-bid conference, Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, reinforced this zero-tolerance stance for dormant acreage when he said: “An oil block award is not a trophy or a medal of honour. It is a binding commitment to invest capital, deploy technology, and bring barrels into the national grid.”
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The Indigenous Heavy Lifting

Industry experts argue that while trust is being rebuilt, there is a need to strengthen infrastructure to turn paper rights into physical oil.

The bid round comes at a pivotal moment in the evolution of Nigeria’s upstream landscape. As major IOCs continue rebalancing their portfolios toward deepwater offshore developments, Nwaochei stated that indigenous independent companies have stepped into the spotlight. Today, indigenous operators account for approximately 60 per cent of national production.

​He urged the indigenous firms to demonstrate “operational excellence and financial bankability” as they take on asset stewardship, decommissioning liabilities, and field optimisation.

Experts note that the transfer of stewardship brings both unprecedented opportunity and considerable burden. Local independents face the twin challenges of managing legacy asset decommissioning liabilities while raising the international capital required for complex subsea tie-backs, deepwater developments, and reservoir optimisation.
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With global financial institutions tightening lending criteria for fossil fuel projects, securing affordable long-term loans remains a key bottleneck for indigenous winners looking to turn prospective seismic data into active production wells.
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Local Content and Capital Bottlenecks

The majority of the indigenous oil and gas companies emerged as the biggest beneficiaries of Nigeria’s 2025 licensing round.

Oil and gas analyst, Jeremiah Olatide, said it is a great development that, for the first time, the majority of the companies that won oil and gas blocks out of 300 companies that indicated interest were indigenous firms.

According to him, the development shows that the Local Content Act is fully being implemented, and it strengthens investor confidence in Nigeria’s upstream and downstream sector, adding that “it is good news to the oil and gas industry in Nigeria.”

“For the first time in the history of the country, 31 indigenous oil and gas companies won the bid. “This is a very big development,” Olatide, who is the CEO of PETROLEUMPRICENG.NG, stated.

While noting that the Federal Government is expected to generate more than $259 million from the exercise through payment of signature bonuses and more, Olatide warned that the ability of the oil firms to commence oil drilling immediately is more important in the long run.

While highlighting the activities of Dangote Refinery in the nation’s downstream, in boosting domestic production of refined products, he said this means that the Local Content Act is doing well and will encourage local investors to take more risks in the country’s oil and gas sector.

Some of the indigenous firms that won oil blocks, such as Ashafa, have been known for their operations in the downstream, importing and distributing petroleum products.

Olatide observed that the trend of more players in the downstream moving to the upstream and operating oil wells is a good development for the industry. “It shows an all-round connectivity in the oil and gas industry in Nigeria,” he stated.

​While noting that the development shows the government is giving full support to local companies, the analyst expressed optimism that there will be more dominance of indigenous firms in the country’s upstream oil and gas space in the future.

Overcoming Operational Imperatives

Beyond the euphoria of more indigenous firms winning licences for the oil and gas blocks, industry experts and analysts have pointed to some urgent operational imperatives that need to be addressed to realise the 3 million bpd target.

These include investments in oil and gas infrastructure, security, better policy and governance frameworks and access to financing for critical upstream projects.

Wumi Iledare, Emeritus Professor of Petroleum Economics and Executive Director, Emmanuel Egbogah Foundation, said the target of 3 million bpd by 2030 is realistic but can only be achieved when certain conditions are met.

​Speaking in an interview on Business Day Television, Prof. Iledare recalled that the vision for 3 million barrels per day production was originally set for 2010 and four million barrels per day in 2020.

While noting that the recent licensing round by NUPRC is a right step towards achieving the target, he warned that “a barrel awarded underground is not the same thing as a barrel produced above ground.”

He stressed that investment, competence of operators and governance of the sector are key to achieving the target.

“Three million barrels per day is achievable but not automatic,” he further stated, adding that all hands must be on deck to enable realisation of the target.

“37 million barrels of reserves producing 3 million barrels per day is a possibility, but it is not automatic,” he further emphasised.

According to him, hydrocarbon reserves are stocks of oil and gas underground deemed extractable under current technology and economic conditions.

He stressed that what will unlock reserves is investments in drilling oil wells, creating an enabling environment for return on investment through the provision of security “for oil to flow”.

The petroleum economist maintained that the licence is just a right to go and explore and prospect for petroleum resources, with the intention of discovering them in commercial quantities.

“The licencing is just a phase,” he noted, adding that after establishing the commercial scale of an oil field, the operator is expected to do a field development plan.

Policy, Governance, and Long-Term Sustainability

On why many oil exploration projects fail to succeed in producing first oil after winning a licence, Iledare attributed it to a lack of an enabling environment and economic conditions.

He, however, pointed out that the biggest challenge is access to capital to finance oil and gas projects.

He noted that while the PIA is supposed to have unlocked the project, implementation of legal provisions has been a challenge.

The energy expert posited that to sustain production and be able to achieve the 3 million barrels per day by 2030, Nigeria needs to invest in new assets to cover for declining value of mature assets, which he said is about 15 per cent per year.

According to him, the country needs to increase crude production by 500,000 barrels per day to take care of declining assets.

​Beyond financing, Iledare stated that the policy institutions in Nigeria must develop above the current level, emphasising the need to separate them from politics, as envisioned by the PIA to drive higher output.

“We must have a consistent policy that is sustainable, and it must be apolitical,” he stated.

​He attributed the inability of the country to realise previous production targets to party politics that influences policy institutions.