The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has addressed concerns surrounding the award of oil blocks to a relatively new company, Panout Oil & Gas, during the 2024 licensing bid round. The Commission dismissed claims of irregularities, asserting that the process strictly followed legal and regulatory guidelines under the Petroleum Industry Act (PIA).
Panout Oil & Gas, reportedly only eight days old at the time of bid submission, emerged as a surprise winner last December, clinching blocks PPL 300/301 CS and PPL 3015. Some industry watchers criticised the development, raising questions over due process and eligibility.
In response, NUPRC issued a formal statement explaining that the age of a company does not determine its qualification. The Commission emphasized that the bid guidelines do not disqualify newly registered entities. Instead, the assessment focused on technical capability, financial strength, and legal compliance.
Bid Process and Criteria
NUPRC Chief Executive, Gbenga Komolafe, clarified that the Commission evaluated not just the bidding entity but also the background and capacity of its promoters and any affiliated or parent organisations. This, he explained, allows Special Purpose Vehicles (SPVs) backed by established players to participate fairly.
He noted that the bid process included several layers of evaluation—prequalification, technical, and commercial. Applicants submitted documentation such as incorporation records, tax clearances, and operational credentials. The prequalification stage did not impose any restriction on the age of participating firms.
Komolafe added that the bidding and result announcement phases used encrypted digital systems and were publicly broadcast. Oversight bodies such as the Nigeria Extractive Industries Transparency Initiative (NEITI) and relevant government ministries monitored the process.
The NUPRC said it applied a point-based commercial evaluation system, incorporating criteria like signature bonus offers, financial commitments for work programmes, and performance guarantees.
Regulatory Confidence and Future Outlook
The Commission further noted that indigenous firms actively competed and, in some cases, outperformed international companies, an outcome it described as a testament to investor confidence following the implementation of the PIA.
NEITI reportedly commended the 2024 Licensing Round, describing it as transparent and professional. The Commission concluded by reaffirming its commitment to fair and efficient regulation that attracts investment and maximizes national hydrocarbon value.