Nigeria’s upstream oil regulator has thrown its full support behind the federal government’s decision to transfer royalty collection powers away from the commission, describing the move as essential to achieving sharper fiscal oversight and stronger institutional accountability across the country’s petroleum sector.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) equally stood by the relatively low signature bonuses attached to its ongoing 2025 oil block licensing round, maintaining that capping entry costs at between $3 million and $7 million was a deliberate policy decision aimed at drawing genuine developers to the table rather than opening the door to speculative bidders.
A Cleaner Division of Labour
Speaking through the commission’s in-house publication, Upstream Gaze, NUPRC Chief Executive Oritsemeyiwa Eyesan said the transfer of royalty collection to the Nigeria Revenue Service (NRS), formalised through a presidential executive order in February 2026, is consistent with the founding objectives of the Petroleum Industry Act (PIA) to close institutional gaps and prevent revenue leakages from the sector.
Under the new structure, the NRS assumes full authority for receiving and enforcing royalty payments, while the NUPRC holds on to its core technical mandate, which covers production measurement, output verification and the computation of royalty liabilities. Eyesan was clear that rather than diminishing the commission’s relevance, the restructuring actually allows it to focus more sharply on what it does best.
She noted that both agencies have developed coordinated frameworks to govern the transition, covering data integrity, harmonised audit procedures and well defined operational responsibilities on each side. Verified production figures from the NUPRC will flow directly to the NRS, closing the information gaps that have historically allowed Nigeria’s hydrocarbon revenues to fall short of their potential.
Eyesan added that operators would experience a smoother, more predictable compliance process under the new arrangement rather than the burden of navigating overlapping demands from multiple regulatory bodies.
Licensing Round: Quality Over Quantity
Turning to the 2025 licensing round covering 50 oil blocks, Eyesan pushed back firmly against the perception that the $3 million to $7 million signature bonus range signals a lack of ambition, arguing instead that the commission had made a conscious pivot away from treating upfront payments as the defining measure of investor quality.
She said the round is anchored on transparent evaluation criteria published well in advance, binding work programme obligations and improved bidder access to seismic and geological data, all intended to lower exploration risk and ensure that awarded blocks move into active development rather than sitting idle.
The approach represents a clear break from earlier licensing cycles, which were widely criticised for rewarding the highest financial offer regardless of whether the winning bidder had the technical depth or operational capacity to deliver results on the ground.
Production Recovery and Renewed Investor Confidence
The upbeat tone from the regulator was reinforced by Olu Verheijen, Special Adviser to President Bola Tinubu on Energy, who said Nigeria’s upstream sector has recorded a strong recovery since the administration came to power in June 2023.
Verheijen said crude oil output has risen from roughly 1.2 million barrels per day in 2023 to more than 1.5 million barrels per day, representing a gain of over 400,000 barrels per day within less than three years. She linked the improvement to coordinated security operations targeting crude theft, a series of fiscal reforms and sustained pressure to bring down project costs across the value chain.
Beyond production figures, Verheijen said Nigeria pulled in more than $8 billion in upstream final investment decisions in 2024 alone, reclaiming its standing as Africa’s foremost destination for oil and gas investment at a time when appetite for such commitments was weakening elsewhere on the continent.
Among the notable milestones she cited was the country’s first significant deepwater investment in well over a decade, as well as growing interest in non-associated gas projects, both of which she described as concrete indicators that investor confidence in Nigeria’s upstream environment has genuinely returned.
Eyes on 2030
On the road ahead, the NUPRC has set production targets of 2 million barrels per day in the short term and 3 million barrels per day by 2030, with a parallel ambition to grow gas output to 12 billion cubic feet per day.
Eyesan acknowledged that hitting those numbers will require faster field development cycles, broader adoption of enhanced oil recovery methods, tighter hydrocarbon accounting practices and access to real time production data to support both planning processes and investor decision making.
Verheijen was candid about the competitive pressure bearing down on Nigeria from emerging hydrocarbon producers in Namibia, Guyana, Senegal and Mozambique, but argued that the country’s reform drive, covering faster regulatory turnaround, stronger coordination among government agencies and direct presidential engagement with international energy investors, has positioned Nigeria firmly among the most attractive upstream destinations in the world.
She also flagged ongoing changes to local content policy, with new directives targeting the removal of intermediaries that add cost without adding value, while building up genuine Nigerian capacity in engineering, fabrication and energy services delivery.
