Shettima Affirms Transparency in Oil Block Awards, Cites Friend's Case

During the Nigerian Upstream Petroleum Regulatory Commission's (NUPRC) fifth-anniversary celebration held in Abuja on Tuesday, Vice President Kashim Shettima, representing President Bola Tinubu, announced a new era of transparency in Nigeria's oil block allocations. He personally attested that a friend of his successfully acquired an upstream asset purely through merit, devoid of any political influence, highlighting the effectiveness of recent reforms in the sector.

Shettima quoted, "Acreages are now awarded through open and competitive bidding processes, and I can bear witness to this part. A friend of mine with no connection whatsoever got awarded an upstream location through a fair and just process." He further stated the Federal Government's unwavering resolve to position Nigeria as the preferred destination for enduring hydrocarbon investments, guaranteeing investors clear terms and the government's commitment to upholding compliance and accountability.

These remarks from the Vice President coincided with the Federal Government's emphasis on strategic reforms designed to draw new capital into the oil and gas sector, boost crude oil output, and dismantle obstacles that previously deterred investors from exploiting Nigeria's vast petroleum reserves. The NUPRC itself came into existence after the passage of the Petroleum Industry Act (PIA) in 2021, mandated to regulate the upstream segment of the petroleum industry and manage petroleum resource administration, encompassing licensing, leases, and field development.

Since its inception, the Commission has successfully managed several licensing and bidding rounds, notably the 2024/2025 oil licensing round, which saw significant interest from both domestic and international firms vying for various oil blocks. According to Shettima, the PIA has brought an end to prolonged industry uncertainty by instituting transparent regulations for investors and empowering host communities with increased ownership in oil-producing regions. He highlighted that these reforms have solidified Nigeria's standing as Africa's premier investment hub for the oil and gas sector for two years running.

The Vice President remarked, "Five years ago, the PIA brought to an end two decades of waiting. I would like to give credit to Senator Ahmed Lawan for shepherding the passage of the PIA Bill. It gave investors clear rules, gave investors a predictable framework, and gave our host communities, for the first time, ownership of resources beneath their land."

Shettima explained that NUPRC's formation was crucial for implementing the new petroleum legislation, noting the Commission's role in boosting oil production and rebuilding investor trust within Nigeria's upstream industry. He observed a significant shift from past periods where crude output was heavily impacted by theft and vandalism to the present, where production levels are showing greater stability.

"Only a few years ago, our oil and gas fields were losing a large share of their output to theft and vandalism," Shettima stated. "Today, through the joint effort of our security agencies, operations, host communities and the Commission, production is steady and stronger. Investors who once looked elsewhere are returning, and for two years now, Nigeria has been ranked Africa’s leading destination for investment in the sector."

The Vice President further underscored the vital contribution of host communities to ensuring stability in oil-producing regions. He noted that over 170 communities have already seen benefits from various projects spanning education, healthcare, and other areas prioritized by the communities themselves.

Shettima added that the Federal Government is actively tackling the challenges of exorbitant costs and protracted contracting procedures, which have historically deterred investments in the sector. He pointed out the implementation of numerous presidential directives and executive orders aimed at enhancing the fiscal and regulatory landscape, introducing incentives for upstream operators and deep offshore ventures.

The Vice President specifically mentioned the Deep Offshore Oil and Gas Project Incentive Tax Remission Order 2026, which is projected to attract up to $50 billion in fresh investments, commencing with the Bonga South-West project. He elaborated, "Some of Nigeria’s largest discoveries are in our deep offshore. And many of them were immediately dismissed because every project had to be negotiated on its own terms. The order replaces that unsettled process with clear criteria. It is designed to unlock up to $50bn in new investment, beginning with the Bonga-South West project. Our message to the world is simple: Nigeria is open for long-term investment and terms are clear."

Shettima tasked the NUPRC with upholding transparency, guaranteeing predictable timelines, and collaborating with other government bodies to resolve regulatory conflicts. He also issued a caution, stating that companies receiving government incentives must fulfill their obligations concerning work programmes, local content development, environmental safeguards, and engagement with host communities.