- Nigeria reduced signature bonuses to attract more upstream investment.
- Bidders will follow a strict two-stage process for block allocation.
Nigeria has cut the 2025 Licensing Round signature bonus to between $3 million and $7 million. This move aims to reduce entry barriers and attract more investors into the upstream sector. The Federal Government confirmed the new rates after approving them through the Minister of Petroleum Resources. The Nigerian Upstream Petroleum Regulatory Commission published the revised structure on its website.
The Commission stated that every bidder must submit an offer within the approved range. This approach supports transparency and encourages wider participation. It also reflects Nigeria’s ongoing efforts to reform its petroleum fiscal regime. The previous bonus levels had discouraged many investors because they were considered too high.
The government began reducing signature bonuses in 2024, when it cut rates from nearly $200 million to $10 million. At the time, officials benchmarked Nigeria against global regimes such as Brazil’s. That comparison showed that Nigeria required more competitive terms. Consequently, the government lowered bonuses for deepwater, shallow-water, and onshore blocks. Under that structure, deepwater blocks carried a $10 million bonus, while shallow-water and onshore blocks required $7 million.
The new review takes the reductions further. Deepwater blocks now attract a $7 million bonus. Onshore and shallow-water blocks require only $3 million. The Commission confirmed that all payments must be made in US dollars. It also emphasised that the designated account is dollar-denominated.
The 2025 bid round offers winners a Petroleum Prospecting Licence. This licence grants exclusive rights to drill exploration and appraisal wells. It also provides non-exclusive rights for wider exploration activities. Holders may dispose of crude oil or gas recovered from production tests.
The licence runs for three years for onshore and shallow-water assets. It may be extended for another three years. Deepwater and frontier blocks carry a five-year term. This duration supports proper evaluation and project planning.
The NUPRC introduced a two-stage bidding process. Applicants will first complete a qualification assessment. Shortlisted companies will then submit technical and commercial bids. This ensures that only competent firms progress to the final stage. Bidders must sign a confidentiality agreement before accessing data.
The regulator also capped the number of applications at two blocks per bidder. This limit includes direct ownership, indirect stakes, or participation through consortia. The Commission warned that all linked applications will be treated as a single application. This rule prevents manipulation and ensures a fair process.