The Federal Government has significantly reduced the financial entry barrier for oil investors as the 2025 licensing round begins. According to an update on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) website, the signature bonus — the upfront payment required from bidders — has been cut to between $3 million and $7 million, down from the previous $10 million benchmark. The move is aimed at attracting more investors into Nigeria’s upstream sector, especially amid global competition for capital.
NUPRC explained that the reduction aligns with the government’s broader drive to make Nigeria’s oil industry more competitive and investment-friendly. “Interested in one of the oil blocks listed for the 2025 Licensing Round? The Nigerian government has graciously reduced the signature bonus to between $3m and $7m,” the commission stated. This marks another step in a reform journey that began in 2024, when the government slashed signature bonuses from around $200m to $10m after benchmarking against countries like Brazil.
A signature bonus is a non-refundable payment that companies must make once awarded an oil or gas asset. Previously, deepwater blocks required a $10m payment, while shallow water and onshore assets attracted $7m. With the latest adjustment, onshore and shallow water blocks now go for as low as $3m, while deepwater attracts up to $7m. NUPRC also reiterated that the fees must be paid strictly in US dollars, not naira.
Successful bidders in the current round will receive a Petroleum Prospecting Licence (PPL), giving them exclusive rights to drill exploration and appraisal wells. The licence is valid for three years — extendable by another three years for onshore and shallow operations — while deepwater and frontier blocks enjoy a five-year term. To ensure transparency, NUPRC is adopting a two-stage bidding process involving a qualification phase and a final bid stage where shortlisted applicants will submit technical and commercial bids.
A total of 50 oil blocks across onshore, shallow water, and deep offshore terrains are available. NUPRC cautioned that no bidder may apply for more than two assets, whether individually or through multiple consortiums, to maintain fairness. The regulator said this approach is designed to prevent over-concentration of assets and allow more players into Nigeria’s upstream sector as the country seeks to boost exploration activities and long-term energy security.
source: Punch