In a stunning turn of events, a Nigerian oil company owned by a computer services firm has outbid industry giants TotalEnergies SE and Chevron Corp to secure key oil blocks. This move marks a major shift in Nigeria’s oil sector, as emerging local firms take center stage in the nation’s crude production.
Panout Oil & Gas Ltd., an up-and-coming energy firm, was registered just days before the government announced the 2024 oil licensing round in May. The company is owned by Saheed Alao, CEO of Lagos-based IT powerhouse Blueprint Business Technologies Ltd., according to corporate records reviewed by Bloomberg. Both businesses operate from Ikoyi’s prestigious Awolowo Street, underscoring their high-profile status.
Panout’s unexpected victory is part of a broader transformation in Nigeria’s oil industry. As Africa’s largest crude producer seeks to revitalize output, it is increasingly relying on local independents rather than international oil giants. More than half of Nigeria’s current oil production is already managed by smaller firms, the state-owned oil company, or entities transitioning ownership, according to Welligence Energy Analytics.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) used a digital, transparent, and point-based system to evaluate bids, prioritizing actual resource development over speculative asset acquisitions. This approach resulted in independent firms like Panout and MRS Nigeria outperforming even state-owned Nigerian National Petroleum Corporation (NNPC).
“The commercial bid evaluation was conducted using a transparent, digital, and point-based assessment system,” said Gbenga Komolafe, NUPRC’s Chief Operating Officer.
When reached for comment, Panout’s owner, Alao, affirmed the company’s readiness to develop the blocks but declined to disclose further details. “We are serious about building something substantial,” he said.
Nigeria’s 2024 licensing round comes at a time when the government is implementing reforms to attract investment and combat corruption. Previous bidding rounds have been plagued by legal disputes, including bribery allegations against major oil corporations, which have slowed the development of several blocks.
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The reluctance of oil giants like Total and Chevron to aggressively pursue new blocks suggests a cautious approach. “There’s an element of ‘wait and see’ from the majors,” noted Clementine Wallop, director for sub-Saharan Africa at political risk consultancy Horizon Engage. “Some may also have concerns about how bid rounds have been managed in the past.”
Despite this, Panout successfully secured three of the 25 oil blocks up for grabs. It won PPL 300 and PPL 301—offered together as a single unit—defeating Total and Chevron. It also claimed PPL 3015, a deepwater block.
While Chevron’s affiliate, Star Deepwater Petroleum Ltd., has pledged continued support for Nigeria’s oil sector, Total declined to comment on the outcome. Under NUPRC guidelines, bidders must demonstrate at least three years of oil and gas experience unless they have veteran technical partners—a clause that likely helped Panout qualify.
Financially, the stakes were high. Bidders needed to prove they had up to $200 million in funding, depending on the block type, and submit bank bonds covering at least 5% of the signature bonus, which ranged from $7 million to $10 million.
The final approval of the oil blocks now rests with Nigerian President Bola Tinubu, who also serves as the country’s petroleum minister. The official licensing ceremony will take place in Abuja, where the government will formally issue the rights to the winning bidders.
With the entrance of technology-backed firms like Panout into Nigeria’s energy sector, the country’s oil industry could be on the verge of a major transformation. This shift signals new opportunities for local investors while posing a challenge to long-dominant multinational oil giants and using smarter means and technology to revolutionize the oil sector.
