Operators in Nigeria are expressing growing concerns as over 55 oil licences across Niger Delta blocks are set to expire before the end of 2025.
This comes amid poor oil production prospects in the North, nearly two years after former President Muhammadu Buhari launched commercial production at the $3 billion Kolmani Integrated Development Project.
Although Nigeria’s rig activity peaked in mid-2024—rising from 29 active rigs in January to 38 in August before stabilizing at around 37 through November—drilling at the Ebenyi-1 Exploration Well in Nasarawa state has stalled due to equipment breakdowns and technical issues.
As of November 2024, the Ikenga 101 rig, hired from Drillog Petro-dynamics, remained inactive at the site.
According to rig disposition data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Wadi well in Bauchi/Gombe—where NNPC is drilling with ACME Energy Integrated Services’ Acme Rig 5—remains on standby as the block’s licence expired and is under renewal.
Additionally, all 41 petroleum prospecting licences (PPLs) awarded to Nigerian companies during the 2022 marginal oil field licensing round are at risk of revocation as they approach expiration.
Despite promises from President Bola Tinubu to sustain the oil sector’s expansion efforts initiated under Buhari’s administration, the anticipated production of 50,000 barrels per day from Nigeria’s newly discovered reserves in the Upper Benue Trough remains uncertain.
The country’s licensing cycle allows the government to revoke or renew oil blocks, raising concerns about the future of existing licensees amid ongoing regulatory changes.
Some of the expiring licences include:
- Sahara Energy’s OPL 228
- Oando’s OML 131 (Deep Offshore)
- OPL 289 (CleanWaters Consortium, Deepwater)
Several PPLs tied to Niger Delta oil blocks will expire by June 27, 2025, including those held by:
- Erebiina Energy Resources (Emohua field)
- Suntrust Atlantic Energies (Egbolom field)
- Ardova Plc (Olua field)
Additional licences set to expire span across OMLs 22, 23, 25, 29, and 30, involving partnerships and equity arrangements among companies like Omega-Butler Marginal Fields, Intessa Energy, and Petrodev Oil and Gas.
Similar expirations will affect fields in OMLs 33, 40, 42, 43, and 46, where operators such as Matrix Energy, Naphta Global, and Energia Ltd oversee fields like Igbomotoru, Abiala, Atamba, and Korolei.
The impact extends to OML 49, where licences for Deep-Offshore Integrated Services and Multiplan Nigeria will lapse, alongside blocks such as OML 53 and OML 62, which host operators like Hilltop Global Oil and Gas, Tulcan Energy Resources, and Platform Petroleum.
Among other expiring licences:
- Sigmund Oil Field Ltd (PPL 228, Ajaketon field, OML 63)
- Northwest Petroleum & Gas Company Ltd (Ede field, OML 67)
- Dutchess Energy Ltd (Udibe field, PPL 236, OML 67)
- Aries Petroco Resources Ltd (Nkuku field, PPL 238, OML 70)
NNPC’s Exploration Plan Faces Skepticism
The Nigerian National Petroleum Company Limited (NNPC) recently submitted a plan to NUPRC for oil exploration in 33 blocks across Chad Basin, Bida, Sokoto, Benue Trough, and Anambra basins. However, industry experts remain skeptical, calling the plan “rather political.”
While oil companies worldwide are turning to Namibia—where major discoveries by TotalEnergies and Shell have transformed the country into an investment hotspot—Nigeria’s oil sector struggles with uncertainties. NNPC and NUPRC have yet to provide data or clarity on their inland basin activities.
Despite widespread divestment from international oil companies (IOCs) in Nigeria, ExxonMobil—exiting the country’s shallow water sector—plans to begin exploration in Namibia’s frontier basin, a region similar to Nigeria’s. U.S. oil giant Chevron is also gearing up for operations in Namibia.
Financial Concerns Over NNPC’s Inland Basin Spending
With about 30% of NNPC’s profits allocated to frontier basins, Nigeria is estimated to have spent $1.2 billion on inland basin exploration within three years of the Petroleum Industry Act (PIA) coming into effect.
Mele Kyari, Group Chief Executive Officer of NNPC, previously stated that 30% of NNPC’s profit amounts to approximately $400 million per year.
Meanwhile, Gombe State Governor Muhammadu Inuwa Yahaya recently urged President Tinubu to intervene in the stalled Kolmani Integrated Development Project, revealing that “nothing was going on at the site.”
Former President Buhari had announced in 2020 the discovery of one billion barrels of crude in the Kolmani River II Well on the Upper Benue Trough, with projections of 19 billion barrels following further exploration. However, this discovery remains unverified as Nigeria’s total crude reserves have not changed.
Before leaving office, Buhari inaugurated the Kolmani Integrated Development Project, claiming it attracted $3 billion in investment for upstream production, oil refining, power generation, and fertilizer production. Yet, with stalled activities and expiring licences, the future of Nigeria’s oil sector remains in limbo.
