As Nigeria opens the window for its 2025 oil licensing round, the Federal Government has significantly lowered the signature bonus—bringing the figure down from $10 million to between $3 million and $7 million. The revised fees were confirmed in an update released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which says the move aims to attract more investors by easing entry barriers.
The regulator noted: “For prospective investors considering any of the blocks listed for the 2025 Licensing Round, the government has approved a reduction of the signature bonus to a range of between $3 million and $7 million.”
It added that all participating bidders are required to submit proposals within the new range as approved by the Minister of Petroleum, marking one of the government’s boldest steps yet to stimulate upstream investments.
In 2024, the signature bonus demanded from successful applicants was already reduced from levels around $200 million to $10 million.
NUPRC Chief Executive Gbenga Komolafe said the adjustment followed comparative studies of similar investment environments such as Brazil, where lower signature bonuses have helped attract substantial exploration commitments.
A signature bonus represents the upfront, non-refundable payment made to a host government when firms receive rights to explore oil or gas blocks.
The Commission had earlier disclosed that deepwater assets attracted $10 million, while shallow-water and onshore fields required $7 million. The latest changes reduce these thresholds even further—placing the new fees at $7 million for deepwater and $3 million for shallow-water and onshore assets.
NUPRC also reiterated that the signature bonus must be paid strictly in U.S. dollars.
“The designated account for the signature bonus is dollar-denominated and cannot be settled in naira,” the regulator said.
Successful bidders in the licensing round will receive a Petroleum Prospecting Licence (PPL), granting them exclusive rights to drill appraisal and exploration wells, conduct petroleum exploration within the assigned territory, and commercialize crude oil or gas derived from production testing.
The licence will run for an initial period of three years, with the possibility of extending for another three years for onshore and shallow-water assets. Deepwater and frontier assets are allotted a five-year tenure.
To ensure transparency and competitiveness, the commission will administer a two-stage bidding process comprising a qualification phase followed by a final bidding phase.
During the qualification stage, prospective bidders or consortiums are expected to submit all mandatory documentation as outlined in the Regulations and Guidelines. Only applicants deemed qualified and shortlisted will proceed to the bid stage, where they must sign a confidentiality agreement before gaining access to proprietary data.
At the bid stage, shortlisted firms will submit both technical and commercial proposals in line with prescribed regulatory standards.
However, the regulator warned that no bidder—whether as an individual entity or as a consortium partner—is permitted to bid for more than two assets.
For companies involved in multiple consortium structures, all related applications will be counted as a single bid.
The NUPRC disclosed that a total of 50 blocks are up for bidding, covering onshore, shallow-water, deepwater, and frontier territories. The available blocks include:
PPL 2A29 to PPL 2A62; PPL 2010; PPL 307; PPL 308; PPL 309; PPL 900 to PPL 903; PPL 700 to PPL 703; PPL 800 to PPL 803.
