2025 Oil Block: FG Reduces Signature Bonus From $10m To $3m

The Federal Government has reduced the signature bonus for the 2025 oil block licensing round to between $3m and $7m.

This is a reductio from the $10m charged per block in the 2024 bid exercise.

According to the “FAQ’s on the Nigerian Upstream Petroleum Regulatory Commission 2025 Licensing Round” released on Monday, the reduction represents a 70 per cent and 30 per cent crash.

The document stated, “The Nigerian government has graciously reduced the signature bonus to between $3m and $7m.”

It noted that the Minister of Petroleum Resources approved the new range to lower entry barriers.

NUPRC added, “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 clarified that the designated signature bonus account is United States dollar-denominated, confirming that it will not be paid in naira.

The NUPRC said the licensing round will adopt a score-based evaluation system, assessing signature bonus submissions (within the prescribed limits), work programme, unit cost per barrel, professionalism, human and technical capacity, bank guarantee percentage, balance sheet strength, turnover, green initiatives, decarbonisation efforts and corporate governance.

On minimum financial requirements, the document said an average $100m is needed for deep offshore blocks and $40m for onshore and shallow water blocks.

It added that eligible bidders must meet an average annual turnover of $100m (deep offshore) or $40m (onshore/shallow water), or
Minimum cash in bank of the same amounts, or a bank guarantee of $100m(deep offshore) or $40m (onshore/shallow water).

For newly incorporated firms, a parent-company guarantee of equivalent value is required.

The NUPRC also stated that bidders, whether applying alone or in a consortium may not submit applications for more than two assets across all entries.

Any equity or management involvement in multiple consortiums will be aggregated and counted as a single bidder.

The Commission said applicants’ technical competence will be assessed based on experience in geological and geophysical capabilities, drilling and well engineering, reservoir evaluation and management, production engineering and technology, development planning as well as facilities engineering and management.

Speaking at the official launch of the bid round last Monday, the Commission’s Chief Executive, Dr Gbenga Komolafe, said the exercise marks a major step toward expanding Nigeria’s reserves base, boosting production, and strengthening the country’s investment profile in the global energy market.

Komolafe said the significant reduction in signature bonuses was a deliberate move to lower entry barriers and enhance competitiveness.

He said the decision aligns with President Bola Tinubu’s directive that Nigeria must not only be open for business but must be “irresistible” to investors.

According to him, the 2025 licensing round will offer 15 offshore assets, 19 shallow-water blocks, 15 frontier acreages, and one deep-water asset.

The Commission projects that successful development of these blocks could add up to 2 billion barrels in reserves over the next decade and deliver about 400,000 barrels per day when fully operational.

He noted that the process will be conducted through a fully automated, digital bidding platform to ensure transparency, predictability, and global competitiveness.

The exercise will follow a two-stage process, a qualification stage and a technical and commercial bid stage with guidelines already published on the Commission’s website.

Komolafe also disclosed that the Commission has invested heavily in acquiring, reprocessing, and interpreting thousands of kilometres of 2D and 3D seismic data, yielding high-resolution subsurface information that reduces exploration risks for investors.

He said certainty and predictability have become “the true currencies of investment,” especially in a volatile global energy landscape, adding that the availability of high-quality geophysical data offers investors lower exploration risks, reduced costs, and faster project timelines.