The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has endorsed the federal government's directive to transfer the responsibility of royalty collection away from the commission, viewing it as a positive development for fiscal clarity and operational efficiency.
Furthermore, the upstream regulatory body has defended the set range of signature bonuses, between $3 million and $7 million, for the 50 oil blocks in the current 2025 licensing round. The NUPRC explained that this deliberate pricing strategy aims to attract investors with proven technical capabilities, robust work programmes, and genuine development capacity, rather than those engaging in speculative bidding.
In an interview featured in the commission's internal publication, 'Upstream Gaze', NUPRC Chief Executive, Oritsemeyiwa Eyesan, highlighted that the shift of royalty collection duties to the Nigeria Revenue Service (NRS) aligns with the objectives of the Petroleum Industry Act (PIA). She stated that this move is intended to enhance transparency, eliminate overlapping functions, and ensure greater revenue assurance.
Eyesan clarified that while the NRS is now tasked with collecting and enforcing royalty payments, the NUPRC maintains its crucial technical oversight functions. These include the measurement of production, verification of volumes, and the calculation of royalty amounts owed.
She emphasized that this division of responsibilities fosters institutional clarity and strengthens accountability throughout the sector. The commission has reportedly established collaborative frameworks with the NRS, focusing on data integrity, standardized processes, and clearly defined roles.
Eyesan reiterated that the NUPRC will continue to act as the technical authority for metering and production validation. The verified data generated will be shared promptly with the revenue agency to prevent any potential revenue shortfalls.
President Bola Tinubu issued an Executive Order in February 2026, stipulating that all revenues originating from the petroleum sector, encompassing royalties, taxes, and profit oil, should be remitted directly to the Federation Account, bypassing collection or retention by regulatory bodies or operators.
The core of this reform involves transferring royalty collection responsibilities to the Nigeria Revenue Service (NRS), which is now accountable for receiving and enforcing these payments. The NUPRC's role is confined to technical duties such as production measurement, volume verification, and the computation of royalty obligations.
“The recent shift of royalty collection to the Nigeria Revenue Service is a positive step for clearer fiscal administration. But under the PIA, NUPRC still plays critical technical roles, including measuring production, verifying volumes and calculating royalty liability” Eyesan stated.
“To keep everything seamless, we’ve set up a coordinated system with the NRS built around three areas: data integrity, aligned processes and clear responsibilities First, on data integrity, the NUPRC remains the technical authority for metering and production verification. We’re strengthening our reporting processes and sharing verified production data with the NRS to avoid gaps, errors or revenue leakages.
“Second, on process alignment, both agencies are considering harmonised templates, timelines and audit procedures, backed by clear Standard Operating Procedures (SOPs) from production reporting through to royalty assessment and collection. This removes duplication and makes compliance easier for operators
“Third, on institutional clarity, the roles are distinct: NUPRC handles technical regulation and validation, the NRS handles collection and enforcement. This separation improves transparency and accountability.
“For operators, the experience will be streamlined, not more complicated. The goal is simple: strengthen revenue assurance while keeping the regulatory environment clear and predictable Overall, this collaboration enhances fiscal transparency, improves efficiency and supports the PIA’s broader objective, ensuring Nigeria gets full value from its hydrocarbon resources while maintaining investor confidence,” Eyesan elaborated.
Regarding the reduced signature bonuses for the 2025 licensing round, set at $3 million to $7 million, the NUPRC chief explained that this decision reflects a deliberate strategic shift. The focus is now on creating long-term value rather than maximizing revenue at the initial award stage.
She elaborated that the commission is prioritizing the technical competence, credible work plans, and financial stability of prospective bidders over speculative bids driven by high upfront payments.
“The current licensing round represents a decisive departure from past exercises. It is governed by transparent rules, with evaluation criteria published upfront and a process that is clearly structured, time-bound and digitally enhanced. Investors now compete with clear technical, financial and operational standards, not on discretion.
“Our focus is clear: value, not volume. We want credible investors who can turn acreage into discoveries and discoveries into real production. To support this, we’ve strengthened data access, tightened evaluation and embedded firm work programme obligations so awarded blocks are actively developed, not warehoused.
“We’ve also lowered unnecessary entry barriers. Signature bonuses for the 2025 round are deliberately moderate ($3-7 million) because we’re prioritising technical competence, strong work programmes and real development capacity over speculative bidding,” she noted.
Eyesan further indicated that enhanced seismic and geological data made available to bidders are expected to lower exploration risks and expedite decision-making processes. Additionally, firm work programme commitments have been integrated to ensure that awarded assets are actively developed.
The NUPRC has also outlined a comprehensive reform agenda beyond licensing, aiming to reposition the regulator as an institution that facilitates business growth. This agenda is built upon three key pillars: production optimization, regulatory efficiency, and sustainable operations.
Eyesan stated that the commission's immediate objective is to stabilize and increase Nigeria's crude oil output to 2 million barrels per day in the short term, with a target of 3 million barrels per day by 2030. Concurrently, the aim is to scale up gas production to 12 billion cubic feet per day.
She observed that achieving these production targets will necessitate accelerated field development, improved oil recovery techniques, enhanced reservoir management, more precise hydrocarbon accounting, and real-time production data to inform planning and investor decisions.
In a separate interview within the same publication, Olu Verheijen, Special Adviser to President Tinubu on Energy, commented on the substantial turnaround in Nigeria's upstream sector under the current administration. She reported that crude oil production has seen an increase of over 400,000 barrels per day in less than three years.
According to Verheijen, output has risen from approximately 1.2 million barrels per day in 2023 to over 1.5 million barrels per day, attributed to improvements in security, fiscal reforms, and cost optimization measures.
She further noted that Nigeria has re-established itself as Africa's premier destination for oil and gas investments, attracting over $8 billion in upstream Final Investment Decisions (FIDs) in 2024 alone, despite a general slowdown across the continent.
Verheijen credited the sector's recovery to targeted interventions, including intelligence-driven security operations to combat oil theft, the implementation of presidential directives designed to enhance fiscal competitiveness, and efforts to resolve structural inefficiencies in project costs.
She pointed out that the country witnessed its first significant deepwater investment in over a decade, along with renewed interest in non-associated gas projects, indicating a restoration of investor confidence.
“Nigeria’s upstream sector has undergone and is undergoing a fundamental repositioning and transformation. When this administration assumed office in June 2023, Nigeria’s upstream sector was at a critical inflection point. Production had fallen to 1.2 million barrels per day. Investor confidence was weak. We had not seen a major deep water Final Investment Decision in over a decade. Two years later, the fundamentals have shifted.
“Production has recovered to over 1.5 million barrels per day, a 400,000-barrel increase in less than three years. Nigeria emerged as Africa’s leading oil and gas investment destination in 2024 and sustained that momentum in 2025, attracting more than $8 billion in upstream FIDs despite a broader regional slowdown,” Verheijen asserted.
Regarding global competitiveness, she acknowledged the increasing competition from emerging hydrocarbon regions such as Namibia, Guyana, Senegal, and Mozambique. However, she stated that Nigeria has strategically repositioned itself through reforms that now place it among the top quartile of attractive investment destinations.
According to Verheijen, the government's focus has been on improving regulatory speed, strengthening inter-agency coordination, and ensuring direct engagement between the presidency and international energy investors to expedite decision-making.
Verheijen also emphasized the positive impact of reforms on local content policies, noting that recent directives aim to eliminate non-value-adding intermediaries while reinforcing genuine Nigerian capabilities in engineering, fabrication, and service delivery.
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