… Calls for Action on Contract Delays
Chairman of the Petroleum Technology Association of Nigeria (PETAN), Engr. Wole Ogunsanya, has voiced strong criticism of the petroleum industry regulators for ongoing delays in oil and gas contract processes. This comes despite a presidential directive aimed at expediting these contracts within a six-month timeframe.
Ogunsanya made these remarks during the opening ceremony of the Nigeria International Energy Summit (NIES) 2026 in Abuja on Monday. He highlighted that the industry regulators have yet to adhere to President Bola Tinubu’s Executive Order (OE) 42, issued in March 2024, which aims to reduce contracting costs and timelines across the petroleum sector as part of broader reforms.
The implementation of local content and contracting timelines is primarily overseen by the Nigerian Content Development and Monitoring Board (NCDMB). However, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Oil and Gas Industry Content Development (NUIMS), the Ministry of Petroleum Resources, and the Ministry of Finance Incorporated (MOFI) are also involved in the approval processes.
Ogunsanya stated, “We are not concluding contract processes in six months as directed, and reports submitted to the Presidency often do not reflect the challenges faced by industry players.” He emphasized that many projects scheduled to begin in 2026 and 2027 are currently stalled due to extended contracting cycles.
A recent study conducted by PETAN revealed that the rate of contract awards is falling significantly short of the presidential target. Most contracts are structured for five years, with potential two-year renewals, yet execution gaps persist.
Despite a notable increase in contracting activities, such as expressions of interest, tenders, pre-qualifications, and evaluations since late 2024, Ogunsanya identified several key challenges:
- Delayed internal approvals
- Slow Final Investment Decisions (FIDs)
- Protracted commercial negotiations
- Lengthy regulatory compliance processes
- Funding and financial closure issues
He urged the Presidency to closely monitor the contracting process to ensure timely project execution, warning that ongoing delays could diminish investor confidence and hinder growth in the sector.