The Federal Government has further lowered barriers for upstream investment as the 2025 oil block Licensing Round kicks off, slashing signature bonuses to a new range of $3 million to $7 million. The move signals a deliberate push to attract fresh capital, deepen exploration activity, and reposition Nigeria as a competitive destination amid global energy shifts.
Government Moves to Attract New Investors
In a statement published on its website, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) confirmed the downward review from the previous $10 million benchmark. The agency explained that the reduction aligns with the government’s drive to incentivise participation and boost exploration across frontier, shallow-water, and deepwater terrains.
“The NUPRC now requires interested bidders to submit offers within the $3m to $7m band approved by the Minister of Petroleum to lower entry barriers.”
This marks the second major cut in two years. In 2024, authorities dropped signature bonuses from about $200 million to $10 million, after benchmarking Nigeria’s fiscal terms against countries like Brazil and Angola.
A signature bonus remains a non-refundable, upfront payment made by successful investors upon signing a petroleum contract. It is one of the biggest determinants of entry affordability for new players seeking oil and gas assets.
New Licensing Terms, Dollar Payments Only
The latest review sets the shallow-water and onshore signature bonus at $3 million, while deepwater assets attract $7 million. The NUPRC stressed that all payments must be made strictly in US dollars, noting that the designated account “is dollar-denominated and cannot receive naira”.
Winners of the 2025 Licensing Round will be issued a Petroleum Prospecting Licence (PPL), granting them the exclusive right to drill exploration and appraisal wells, conduct seismic work, and lift hydrocarbons recovered during production tests.
The licence spans three years initially, with an additional three-year extension for onshore and shallow-water assets. Deepwater and frontier licences carry a five-year tenure.
Two-Stage Bidding, Strict Application Limits
To ensure transparency, the commission adopted a two-stage bidding framework, a qualification stage followed by the bid stage.
At the qualification stage, applicants must supply all regulatory information and demonstrate technical and financial capacity. Only shortlisted companies will proceed to the confidential bidding phase.
However, bidders face strict participation limits: no entity may apply for more than two assets, whether individually or through multiple consortiums. Equity or management involvement in more than one consortium will count as a single bidder’s application.
A total of 50 blocks are on offer across Nigeria’s onshore, shallow-water, deep offshore, and frontier basins, including PPL 2A29 to PPL 2A62, PPL 2010, PPL 307, and others in the 700, 800, and 900 series.
With global investors increasingly selective about jurisdictions and fiscal terms, Nigeria’s latest move seeks to stimulate upstream activity, unlock new reserves, and strengthen its long-term revenue prospects especially at a time the country is repositioning for energy transition competitiveness.