FG cuts signature bonuses to as low as $3m as 2025 oil licensing round opens

The Federal Government has again slashed the signature bonuses required for oil block bidders, reducing the payment to between $3 million and $7 million as part of efforts to lower entry barriers in the 2025 Licensing Round.

The Nigerian Upstream Petroleum Regulatory Commission disclosed the revised rates in an update on its website, saying all bidders must now submit offers within the new range approved by the Minister of Petroleum Resources.

“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,” the commission wrote. “All bidders shall be required to submit a bid within a range of $3m and $7m… for the reduction of entry barriers.”

The latest cut continues the government’s shift away from the historically high signature bonuses that once defined Nigeria’s licensing rounds. In 2024, the NUPRC reduced the bonus from about $200 million to $10 million after benchmarking Nigeria against regimes in countries like Brazil.

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Under last year’s structure, deepwater assets attracted a $10 million bonus while shallow-water and onshore blocks required $7 million. Those figures have now been further reduced to $7 million and $3 million, respectively.

The NUPRC clarified that the bonus must be paid in US dollars only. “The designated signature bonus account is United States dollar-denominated,” it said.

The commission said winners will receive a Petroleum Prospecting Licence, which grants exclusive rights to drill exploration and appraisal wells and non-exclusive rights to carry out further petroleum exploration activities. Licence holders may also dispose of crude oil or gas obtained from production tests.

The PPL will run for an initial three-year period, extendable by another three years for onshore and shallow-water assets. Deepwater and frontier blocks carry a five-year term.

NUPRC has adopted a two-stage bidding structure. Applicants will first undergo a qualification assessment, after which shortlisted companies will proceed to the bid stage and submit technical and commercial proposals. Companies must sign a confidentiality agreement before accessing bid documents.

The regulator capped applications at a maximum of two blocks per bidder, including indirect ownership or participation through consortia.

“To avoid abuse, all applications linked to a bidder—whether through equity, direct or indirect ownership, or management involvement—shall be aggregated and treated as a single bidder’s application,” it warned.

A total of 50 blocks spanning onshore, shallow-water, and deep offshore terrains are on offer. They include: PPL 2A29 through PPL 2A62; PPL 2010; PPL 307; PPL 308; PPL 309; PPL 700–703; PPL 800–803; and PPL 900–903.

Oluwatosin Ogunjuyigbe is a writer and journalist who covers business, finance, technology, and the changing forces shaping Nigeria’s economy. He focuses on turning complex ideas into clear, compelling stories.

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