The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has defended its decision to award oil blocks to Panout Oil & Gas, a newly incorporated company, during the 2024 Oil Block Licensing Round, saying the entire process was transparent, competitive, and compliant with the law.
Concerns had been raised after it emerged that Panout Oil & Gas an eight-day-old company at the time of bidding beat more established firms, including TotalEnergies, to win oil prospecting licences (PPL) 300/301 CS and PPL 3015 during the commercial bid conference held in Lagos in December 2024.
Critics described the development as “illegal” and questioned the Commission’s adherence to its own regulatory guidelines. But in a statement released this week, the NUPRC firmly refuted the allegations, insisting that no violations occurred.
“There were no violations of oil licensing guidelines during the 2024 Oil Block Licensing Round,” the Commission said, adding that the process was conducted in line with the Petroleum Industry Act (PIA) and NUPRC’s established procedures.
Age of Company Not a Disqualifier — NUPRC
The Commission’s Chief Executive, Gbenga Komolafe, explained that the age of a bidding company was not a disqualifying factor in the bid guidelines.
“The bid guidelines do not restrict participation based on the age of a company’s incorporation,” Komolafe clarified. “Eligibility was determined by a rigorous assessment of technical expertise, financial strength, and legal compliance.”
He further noted that the evaluation criteria extended to the track records of the promoters, affiliated entities, or parent companies behind the bidding firms.
“This approach allows newly formed Special Purpose Vehicles (SPVs) backed by credible and experienced industry players to compete effectively and fairly,” he said.
Multiple Stages and Transparent Digital Process
Komolafe detailed that the licensing round consisted of several key stages, including pre-qualification, technical evaluation, and commercial bid assessment. Companies were required to submit comprehensive documentation such as incorporation certificates, tax clearances, and proof of operational capacity.
Importantly, he said, the bidding process was carried out digitally using encrypted technology to ensure security and transparency. Results were announced during live televised sessions attended by stakeholders, including the Nigerian Extractive Industries Transparency Initiative (NEITI) and representatives of relevant government ministries.
“The commercial evaluation used a point-based system factoring in signature bonuses, proposed work programme financial commitments, and performance guarantees,” the Commission explained.
NEITI, which monitored the bid round, reportedly commended the process for its professionalism and transparency, marking a significant improvement from past exercises.
Indigenous Firms Outperformed Multinationals
The NUPRC highlighted that several indigenous oil firms “aggressively participated” in the 2024 round, outbidding both national and international oil companies in a show of renewed investor confidence, buoyed by reforms under the Petroleum Industry Act (PIA) 2021.
Komolafe concluded by reaffirming the Commission’s commitment to fair, transparent, and technology-driven regulation.
“The 2024 Oil Block Licensing Round adhered fully to statutory provisions and guidelines, with no discrimination or corrupt practices involved,” the statement added. “The NUPRC remains committed to transparent regulation aimed at optimizing Nigeria’s hydrocarbon resources and attracting investment under President Bola Ahmed Tinubu’s administration.”
