By Editor
The Federal Government of Nigeria has reduced the signature bonus for oil blocks in the 2025 licensing round to between $3 million and $7 million, down from the previously approved $10 million, as part of efforts to lower entry barriers and attract more investors.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed this in an update published on its website, noting that the revised figures were approved by the Minister of Petroleum.
“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.
“All bidders shall be required to submit a bid within this range as approved by the minister for the reduction of entry barriers.”, it added.
The reduction represents a further cut from the 2024 adjustment, when the Federal Government slashed signature bonuses from as high as $200 million to $10 million. At the time, the Chief Executive of NUPRC, Gbenga Komolafe, said the commission benchmarked Nigeria’s fiscal terms against peer jurisdictions such as Brazil and concluded that a significant reduction was necessary to improve competitiveness.
A signature bonus is a non-refundable payment made by a contractor to the government upon the signing of a petroleum agreement. Companies awarded oil or gas assets are required to pay the bonus before commencing operations.
Under the revised structure, deepwater assets—which previously attracted a $10 million signature bonus—will now require up to $7 million, while shallow water and onshore assets have been reduced to as low as $3 million.
The commission also clarified that signature bonuses must be paid in United States dollars. “The designated signature bonus account is United States dollar-denominated,” the NUPRC said.
According to the regulator, successful bidders in the 2025 licensing round will be issued a Petroleum Prospecting Licence (PPL). The licence grants the holder the exclusive right to drill exploration and appraisal wells, the non-exclusive right to conduct petroleum exploration activities within the licensed area, and the right to dispose of hydrocarbons produced during testing.
The licence will have an initial duration of three years, with a possible three-year extension for onshore and shallow water assets, while deepwater and frontier acreages will have an initial tenure of five years.
The NUPRC added that the licensing round will follow a two-stage bidding process, comprising a qualification stage and a bid stage.
The qualification stage will involve the submission and evaluation of applications by interested companies or consortia, after which only shortlisted bidders will proceed to the bid stage and execute a confidentiality agreement.
At the bid stage, shortlisted applicants will submit technical and commercial bids in line with the applicable regulations, guidelines, and bidding documents.
The commission also warned that no bidder—whether acting alone or as part of a consortium—may apply for more than two assets in total across all applications.
