ABUJA, Nigeria (VOICE OF NAIJA)-As the 2025 licensing round begins, the Federal Government has lowered the signature bonus from $10m to between $3m and $7m.
This information was provided in an update released by the Nigerian Upstream Petroleum Regulatory Commission on its website.
According to the commission, the reduction is intended to ease entry conditions for potential investors.
It stated, “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.
“All bidders shall be required to submit a bid within a range of $3m and $7m as approved by the minister of petroleum for the reduction of entry barriers,” the commission added.
In 2024, the government had earlier reduced the signature bonus for successful bidders from about $200m to $10m. At the time, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, noted that a review of global practices including those of countries like Brazil showed the need for Nigeria to adjust its own rates.
A signature bonus is a non-refundable fee paid to the government once an agreement is signed. Companies awarded oil or gas assets are expected to make this payment.
Previously, deepwater investments attracted a $10m signature bonus, while shallow water and onshore areas required $7m. The latest adjustment now places these figures at $7m and $3m.
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The commission also emphasised that signature bonuses must be paid in foreign currency. It stated, “The designated signature bonus account is United States dollar-denominated.”
The regulator explained that winners in this licensing round will receive a Petroleum Prospecting Licence.
This licence grants the holder exclusive rights to drill exploration and appraisal wells; non-exclusive rights to carry out exploration activities within the licensed area; and rights to dispose of crude oil or natural gas recovered during production testing.
The licence is valid for “an initial duration of three years, with a possible extension of another three years for onshore and shallow waters, while it is five years for deep water and frontier.”
The commission also announced a two-step bidding system for awarding the blocks, consisting of a qualification phase and a bid phase.
“The qualification stage involves the submission and evaluation of applications by interested parties or consortia in accordance with the Regulation and the Guidelines.
“Applicants shall provide all information required for this stage. Only applicants who are adjudged qualified and subsequently shortlisted by the commission shall proceed to the bid stage and will be required to execute a Confidentiality Agreement prior to participation.
“At the bid stage, shortlisted applicants or bidders shall submit their technical and commercial bids in accordance with the regulation, the guidelines, and any other bidding documents issued by the commission.”
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To maintain fairness, the regulator warned that no bidder may apply for more than two assets either individually or as part of multiple consortiums.
It clarified, “Participation in more than one consortium shall count towards this limit. For the avoidance of doubt, where a company has equity, direct or indirect ownership, or management involvement in multiple consortium vehicles, all such applications shall be aggregated and treated as a single bidder’s application.”
In total, the commission listed 50 blocks across onshore, shallow water, and deep offshore zones.
The blocks available include: “PPL 2A29; PPL 2A30; PPL 2A31; PPL 2A32; PPL 2A33; PPL 2A34; PPL 2A35; PPL 2A36; PPL 2A37; PPL 2A38; PPL 2A39; PPL 2A40; PPL 2A41; PPL 2A42; PPL 2A43; PPL 2A44; PPL 2A45; PPL 2A46; PPL 2A47; PPL 2A48; PPL 2A49; PPL 2A50; PPL 2A51; PPL 2A52; PPL 2A53; PPL 2A54; PPL 2A55; PPL 2A56; PPL 2A57; PPL 2A58; PPL 2A59; PPL 2A60; PPL 2A61; PPL 2A62; PPL 2010; and PPL 307.”
Additional blocks listed include: “PPL 308; PPL 309; PPL 900; PPL 901; PPL 902; PPL 903; PPL 700; PPL 701; PPL 702; PPL 703; PPL 800; PPL 801; PPL 802; and PPL 803.”