In a move showing sustained activity in her upstream petroleum sector despite a moderation in permit volumes compared to the previous quarter, the Nigerian government issued 7,942 oil and gas industry service permits and 49 upstream monitoring licences in Q1, 2026.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) made the disclosure in its Upstream Service Industry Newsletter for the first quarter of 2026.

According to the report, a total of 7,942 permits were issued under the Oil and Gas Industry Service Permit (OGISP), scheme between January and March 2026, while 49 upstream monitoring and regulation licences were granted during the same period.

The commission noted that permit volumes declined 22.3 per cent compared to the fourth quarter of 2025 but attributed the moderation to normal regulatory cycles rather than a slowdown in industry activity.

“A total of 7,942 permits were issued under the OGISP in Q1 2026. This represents a 22.3 per cent decline compared to Q4 2025. Major and specialised permit categories accounted for over 90 per cent of total permits issued,” the report stated.

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The report further stated that the licences covered rig inspections and certifications, hydraulic workover certifications, and vessel licences, among others.

A breakdown of the licensing activities showed that February recorded the highest level of activity, accounting for 24 licences, or about 49 percent of the total licences issued during the quarter. Rig-related licences represented approximately 69 percent of all approvals granted within the period.

The report further revealed that major and specialised permit categories accounted for more than 90 percent of all permits issued under the OGISP framework during the quarter.

The Commission asserted that the upstream service sector maintained stable performance during the period, supported by sustained licensing activities, permit processing, and ongoing regulatory reforms aimed at improving transparency and operational efficiency in the industry.

The NUPRC said key policy reforms, licensing advancements, and strategic collaborations undertaken during the quarter helped strengthen investor confidence and support operational activities across the upstream oil and gas value chain.

The report also highlighted continued progress in the sector, including the signing of a new 11,700-square-kilometre 3D seismic survey agreement and record gas output achieved by key operators during the quarter.

According to NUPRC data, Nigeria’s active rig count rose to 73 in March 2026 as operators sustained drilling activities and expanded exploration and production programmes.

The report showed that the number of active rigs stood at 72 in January and February before rising to 73 in March, reflecting continued investment in upstream oil and gas operations.

Providing an overview of the quarter, the commission stated that the upstream service sector remained resilient despite broader industry challenges. N1.23bn was generated from oil and gas industry service permits.

“Q1 2026 reflected stable upstream service sector performance, supported by consistent rig activity, sustained licensing (49 UMR licences), and strong OGISP revenue generation of N1.23bn,” the report stated.

According to the regulator, land operations remained the dominant segment of Nigeria’s drilling activities during the quarter.

The report noted that land-based rigs remained steady at 52 throughout the three-month period, accounting for the largest share of total drilling activity.

Offshore operations increased modestly from 11 rigs in January and February to 12 rigs in March, while swamp operations remained unchanged at nine rigs during the period.

Explaining the trend, the commission said, “The data shows that Nigeria maintained stable rig activity from January to February, with total rigs increasing slightly from 72 to 73 in March.

“Land operations accounted for the highest number of rigs, as it remained stable in Q1 with 52 rigs and drove the overall increase. Offshore rigs remained steady at 11 January and February and increased to 12 in March, while swamp rigs were constant at 9 throughout the period.”

The regulator said the performance demonstrated continued operational stability across Nigeria’s upstream sector.

“Overall, the trend reflects stable drilling operations, with marginal growth concentrated in land-based activities,” the report added.

More significantly, the commission revealed that drilling activity increased substantially compared with the corresponding period of last year.

“Q1 2026 showed an increase (22.6 per cent) in total rig count compared to Q1 2025, indicating strong growth in upstream activity,” the report stated.

The increase suggests that operators are intensifying development activities amid ongoing reforms introduced under the Petroleum Industry Act and efforts by the regulator to attract investment into the sector.

The latest figures suggest that Nigeria’s upstream industry maintained positive momentum in the first quarter of 2026, with increased drilling activity, sustained licensing and ongoing exploration programmes providing fresh signals of investor confidence in the country’s oil and gas sector.

Stakeholders have urged the Federal Government to initiate a new competitive bidding process for the planned sale of a 40 per cent interest in the Amukpe–Escravos Pipeline, while opposing efforts to resurrect an earlier transaction that had already been terminated.

Amid growing concerns, stakeholders are urging a fresh valuation to establish the true worth of the disputed asset, citing the possible impact of the outcome on investor confidence in Nigeria’s oil and gas industry.

The Amukpe–Escravos Pipeline, which runs from Amukpe in Delta State to the Escravos export terminal in Warri, is jointly owned by Pan Ocean Oil Corporation, which holds 40 per cent, and NNPC Exploration & Production Limited, which controls the remaining 60 per cent.

The asset, with a transportation capacity of about 160,000 barrels per day, has become a strategic crude evacuation route in the western Niger Delta since it became operational in 2022 and has reportedly maintained operational uptime above 95 per cent.

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It was learnt that the proposed sale of Pan Ocean’s 40 per cent stake is tied to a debt restructuring and recovery arrangement involving lenders and the Asset Management Corporation of Nigeria, under which proceeds from the disposal are expected to be used to settle outstanding obligations.

The divestment process has, however, been entangled in disputes over valuation and transaction history.

It was gathered that an earlier transaction involving the proposed acquisition of the 40 per cent stake, valued at about $243m, collapsed in October 2024 after the buyer allegedly failed to meet payment obligations and commercial conditions attached to the deal. Concerns later emerged after indications that the transaction was being revisited using valuation benchmarks linked to the failed process.

An independent assessment reportedly conducted in 2025 was said to have subsequently valued the 40 per cent stake at between $544m and $641m, instead of $243m.

The valuation gap has been fuelling criticism from industry observers, who argued that disposing of the asset below current market value could short-change the country and weaken confidence in regulatory and commercial processes within the oil and gas sector.

Speaking during a recent interview on national television, the Managing Director of Policy Management Consult Services, Jide Olatuyi, said renewed efforts to revive the failed transaction had raised broader concerns about governance, transparency and the credibility of Nigeria’s investment environment.

“What stakeholders are saying is that there is a need for a new competitive bidding process rather than attempting to revive a dead transaction,” Olatuyi said.

He dispelled thoughts that opposition to the proposed transaction was driven by sentiment or commercial rivalry, saying the issue was fundamentally about governance standards.

“I don’t think it is about sentiment at all. It is about governance in the oil and gas sector,” he stated.

According to him, Nigeria’s challenge is no longer limited to attracting investors but also ensuring that investors have confidence in the integrity of the country’s commercial and regulatory processes.

Olatuyi added that several stakeholders, including project lenders such as Sterling Bank and the Asset Management Corporation of Nigeria, had advocated a transparent process that reflects current market realities and updated asset valuations.

He urged the authorities to ensure that any future transaction involving the asset is conducted through an open, transparent and competitive process capable of inspiring investor confidence and safeguarding public value.

“If you are not committed to transparency, it becomes a problem for investors. If you cannot build trust and confidence in the sector, capital will go elsewhere,” he asserted.

Earlier, a public affairs analyst and Executive Director of the Development Specs Academy, Prof. Okey Ikechukwu, also called for the immediate suspension of processes relating to the proposed sale, warning that proceeding with the transaction under the current terms would amount to a giveaway of a strategic national asset.

“If that is allowed to happen, it means there is no governance. It means that people can exercise arbitrary discretion. It means that processes can be routinely violated,” he said.

The don argued that reviving the sale on the basis of disputed or outdated valuation benchmarks would undermine due process and public confidence.

“We are not under any desperate need to sell it at a giveaway price, and that’s what appears to be happening here. If that is allowed to happen, then it means there is no governance,” he cautioned.

Referring to the pipeline as a “performing national asset,” Ikechukwu argued that any sale of such an asset must reflect its true market value, stating, “If you must sell a performing national asset, it must be sold at the right value.”

He also warned that proceeding without an updated valuation process could erode investor confidence and raise concerns among lenders.

“But beyond all of that, where will investor confidence be? If you are a lender, how do you feel in this kind of environment? It might even be interpreted as sabotage,” he said.

Ikechukwu called for the immediate suspension of all ongoing processes connected to the proposed transaction.

“All processes leading up to the presumed attempt to sell it now should be stopped. Quite frankly, terminated. An independent evaluation should take place so that we know the current value of what is on the table and ensure that the country does not lose money in the process.”

A United States-based energy consultant, Chukwuma Atuanya, said the Amukpe–Escravos Pipeline had improved crude evacuation and strengthened Nigeria’s oil export reliability since it became operational in 2022.

“Since inauguration, the underground system has demonstrated exceptional uptime and asset integrity, outperforming comparable overground pipelines in the region,” he said.

He added, “Its burial depth and bypassing of traditional security hot spots also serve as a significant competitive advantage for product delivery to Escravos.”

Courtesy – The Punch

The monitoring of upstream operations in Nigeria is in for radical transformation because the Heirs Energies OML 17 Joint Venture has collaborated with Redtech to unveil its Integrated Operations Monitoring Centre (IOMC).

It was gathered that the IOMC is a next-generation digital operations hub designed to digitally monitor the way upstream assets are monitored, managed and optimised.

According to the company, the commissioning marks a significant milestone in the joint venture’s commitment to operational excellence, innovation and technology-driven performance by bringing together operational intelligence, production monitoring, security surveillance, hydrocarbon evacuation, facility performance and critical asset data into a single integrated environment.

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In a statement, the company stated that the monitoring centre, developed through a collaboration between Heirs Energies, operator of OML 17, and Redtech, the technology company within the Heirs Holdings Group, represents the convergence of energy expertise and digital innovation to enable faster decision-making, improved collaboration and greater operational visibility across OML 17.

Speaking at the unveiling, the Chief Executive Officer of Heirs Energies, Osa Igiehon, said the centre would provide real-time visibility of the company’s operations and improve efficiency.

“The future of upstream operations will be driven by data, technology and intelligent decision-making. The Integrated Operations Monitoring Centre provides us with a real-time operational view of our assets, enabling quicker decisions, improved collaboration and enhanced operational efficiency. It reinforces our commitment to deploying innovation to deliver safer, smarter and more resilient operations across OML 17,” the CEO said.

According to the company, the IOMC serves as the digital nerve centre of the joint venture by integrating operational data from multiple systems into a single platform that supports proactive decision-making, production optimisation, asset integrity and operational risk management.

It added that the centre also strengthens the security of OML 17’s remote assets through an intruder detection and surveillance system, enabling real-time monitoring, early threat detection and faster incident response across critical facilities and infrastructure.

The firm added that beyond real-time monitoring, the centre provides a foundation for future capabilities, including predictive analytics, remote operations, artificial intelligence-enabled decision support and advanced production optimisation.

The Managing Director and Chief Executive Officer of Redtech, Emmanuel Ojo, said the project demonstrates the value of technology in addressing operational challenges.

He said, “At Redtech, we believe technology should simplify operations, improve decision-making and create measurable business value. The IOMC demonstrates what is possible when digital innovation is applied to industrial operations. Working alongside Heirs Energies, we have delivered a platform that enables connected operations, intelligent monitoring and faster operational response. This is another example of how technology can unlock greater efficiency and performance across Africa’s energy sector.”

The statement noted that since assuming operatorship of OML 17 in 2021, Heirs Energies has transformed one of Nigeria’s largest onshore assets through its Brownfield Excellence strategy, increasing oil production to over 50,000 barrels of oil per day while expanding domestic gas supply to over 135 million standard cubic feet per day and improving operational reliability.

The company added that the IOMC represents the next phase of this transformation by embedding digital capability at the heart of field operations and reinforcing the joint venture’s commitment to safe, efficient and technology-enabled energy production.