That balance matters in a market competing for limited capital. The International Energy Agency’s World Energy Investment 2025⁠ estimates that energy investment in Africa is one-third lower in 2025 than it was in 2015. That figure covers the wider energy sector, not Nigerian upstream projects alone. Still, it is a useful reminder that investors have choices, and that regulatory design can influence where they put their money. (iea.org⁠)

The Petroleum Licensing Round (Amendment) Regulations, 2026, dated 9 March and listed on the Nigerian Upstream Petroleum Regulatory Commission’s gazetted regulations page⁠ as updated on 15 September, address bidder qualification, reserve bidders and guarantees. The test is whether they help Nigeria select developers with the means and intent to deliver while keeping the route into the market predictable. (nuprcdemo.nuprc.gov.ng⁠)

The consortium provisions could make it easier for firms to combine financial strength, technical expertise and local knowledge. Every member must meet the legal requirements, while the financial requirement may be met by one member. The designated operator, however, must meet the prescribed criteria. The Commission should clarify how those provisions work together, particularly whether the operator must also satisfy the financial test. Bidders need to know what each member must bring before they commit time and money to a partnership.

That clarity matters for indigenous firms as well as international investors. Consortiums can widen participation by allowing companies to pool complementary strengths. But if the qualification rules are difficult to interpret, smaller companies may struggle to find credible partners, and larger firms may hesitate to rely on a structure whose eligibility is uncertain. A sound rule should reward a consortium that has genuinely assembled the capacity to develop a block, not just one that has assembled the right paperwork.

The provision for up to four reserve bidders also has a practical case. If a leading bidder fails to meet post-award conditions, the Commission can turn to the next qualified bidders instead of immediately returning the block to the market. That may help keep the process moving. But reserve status is not proof of development capacity. The same standards of scrutiny should apply to reserve bidders as to the winner.

Guarantees are another area where precision matters. The amendment should not be described as introducing bid guarantees or the 100 per cent work commitment guarantee from scratch. The 2022 Petroleum Licensing Round Regulations⁠ already required bid guarantees and a work commitment guarantee equal to the value of the minimum and additional work programme commitments. The 2026 amendment retains that framework, with the Commission determining the amount where the guarantee itself is a bid parameter. (nuprc.gov.ng⁠, nuprc.gov.ng⁠)

The cost to a bidder depends on how the security is provided. A guarantee is not automatically a cash payment equal to its face value. But it can attract fees, require collateral or use credit capacity that a company needs for exploration and development. The burden will vary with the issuing institution, the guarantee’s terms and the bidder’s access to finance. So the relevant question is not simply whether a guarantee exists. It is whether its amount and structure are clear, proportionate and workable for companies that can actually deliver.

NUPRC’s 2025 Licensing Round Guidelines⁠ make the need for clarification more apparent. They use a minimum work performance security of 1 per cent of the proposed work commitment as a scored bid parameter. Separately, they say the post-award work commitment guarantee will be for an amount determined by the Commission.

Those provisions do not, on their face, establish that the 1 per cent bid parameter and the 100 per cent guarantee are the same instrument or serve the same purpose. A worked example showing what is secured, when it must be posted and how long it remains in force would help bidders and their banks understand the exposure. (br2025.nuprc.gov.ng⁠.br2025.nuprc.gov.ng⁠)

The legal framework already sets a public standard for the process. The Petroleum Industry Act⁠ requires open, transparent and competitive bidding, including electronic bidding open to the public in the presence of representatives of NEITI, the Ministry of Finance and the petroleum ministry. The 2023 EITI Standard⁠ adds a useful global benchmark: disclose the procedures and criteria used to award licences, who received them and the outcomes. Transparency is more than an open bid conference. It also means that observers can understand how the rules were applied. (pia.gov.ng⁠, eiti.org⁠)

The 2025 round offers useful context, but it is not proof of what the amendment will do. NUPRC reported that 143 companies submitted 200 bids for 37 of the 50 blocks on offer; 13 blocks received no bids. Those figures describe participation in that round. They do not, by themselves, show whether the amended rules will increase development, narrow competition or change the cost of entry. The round operated through its own guidelines and conditions, so the amendment’s effect will need to be judged from later results. (nuprc.gov.ng⁠)

The Commission now has an opportunity to turn the amendment’s intent into a stronger licensing system. It should clarify the consortium tests, explain how each security requirement works and publish the basis for its evaluations. Success will be measured not just by the number of bids or blocks awarded, but by whether credible winners raise the finance, meet their work commitments and move acreage towards development.

Nigeria must make it harder to win acreage without the capacity to develop it. It must also make the rules clear and financeable enough that capable bidders still want to participate. The discipline is necessary. So is the confidence that allows capital to respond.

Sola Adebawo is an energy industry executive, strategic adviser and thought leader with 30 years of experience in the oil and gas industry, including senior leadership roles across Africa’s upstream petroleum sector. He is the Chief Executive Officer of Hyphen Partners Limited, a specialist advisory firm focused on policy and regulatory intelligence, market entry, stakeholder strategy, and executive and institutional positioning in complex, highly regulated industries. A former executive at Chevron and Heritage Energy, he is an author, scholar and ordained minister. His writing explores energy policy, political economy, corporate governance, strategic communication, leadership, the relationship between institutions and public life, and the forces shaping Africa’s development.