FG cuts oil block entry fee to $3m
As the 2025 oil licensing round begins, the Federal Government has lowered the signature bonus from $10 million to between $3 million and $7 million. This update was announced by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on its website.
The commission explained that the reduction is aimed at easing entry barriers for investors. “Interested in any of the oil blocks listed for the 2025 Licensing Round? The Nigerian government has reduced the signature bonus to between $3m and $7m,” it said. All bidders must now submit offers within this new range, as approved by the Minister of Petroleum.
The PUNCH earlier reported that in 2024, the government reduced the signature bonus from about $200 million to $10 million. NUPRC Chief Executive Gbenga Komolafe noted that after reviewing signature bonus requirements in countries such as Brazil, the commission found it necessary to adjust Nigeria’s rates.
A signature bonus is a one-time, non-refundable payment made to the government when a company signs an oil or gas contract. Companies awarded petroleum assets are required to pay this fee. Last year, the commission stated that deepwater blocks required a $10 million bonus, while shallow-water and onshore blocks required $7 million. These new reductions move the fees to $7 million and $3 million, respectively.
The commission also emphasized that the signature bonus must be paid in U.S. dollars, as the designated account is not naira-denominated.
Successful bidders in the 2025 round will receive a Petroleum Prospecting Licence (PPL), which grants exclusive rights to drill exploration and appraisal wells, conduct exploration activities, and extract and dispose of oil or gas obtained during test production. The licence lasts three years initially, with the possibility of a three-year extension for onshore and shallow-water assets, and five years for deepwater and frontier areas.
NUPRC stated that the bidding process will follow a two-stage system consisting of a qualification stage and a bid stage. During the qualification stage, interested companies or consortia must submit all required documents. Only those deemed qualified will advance to the bid stage and will need to sign a Confidentiality Agreement before participating.
At the bid stage, qualified bidders must submit their technical and commercial proposals in line with the guidelines and regulations set by the commission.
The regulator also cautioned that no bidder—whether acting alone or within a consortium—may apply for more than two assets. Participation in multiple consortia will count toward this limit, and any company with direct or indirect ownership across several bidding groups will be treated as a single bidder.
A total of 50 blocks across onshore, shallow-water, and deep offshore areas are available in this licensing round. These include blocks PPL 2A29 through PPL 2A62, PPL 2010, PPL 307, PPL 308 to PPL 309, PPL 900 to PPL 903, PPL 700 to PPL 703, and PPL 800 to PPL 803.
Source: punchng