The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced a reduction in the range of signature bonuses to between $3 million and $7 million per block in the ongoing 2025 oil licensing round.
The move is aimed at lowering entry barriers and attracting more investors.
This marks a significant cut from the $7 million to $10 million range applied in the 2024 round. The update was disclosed by NUPRC on its verified X handle on Monday, as reported by Energy in Africa.
A signature bonus is a non-refundable, upfront payment made by an oil company to the government when awarded a license to explore and produce oil and gas. It is essentially the “entry fee” for gaining access to a block, serving as a revenue source for the government.
It also demonstrates the company’s commitment and financial capacity to develop the block, while helping the government gauge investor interest in specific acreage.
As is common in most oil-rich countries, Nigeria requires signature bonuses in its upstream licensing rounds. These payments vary depending on the attractiveness of the block, competition, and government policy.
In frontier or less-proven basins, governments may reduce or waive bonuses to encourage exploration.
Luring investors with lower signature bonus
Nigeria has gradually reduced its signature bonus over the years, following a series of executive orders from the last two administrations.
Before August 2021, when the landmark Petroleum Industry Act (PIA) was passed, signature bonuses ranged between $100 million and $200 million depending on the terrain.
The first downward revision came months before the 2024 round, when the bonus was lowered to $10 million for deepwater assets and $7 million for onshore and shallow offshore blocks.
It has now been further reduced to between $3 million and $7 million, following new presidential directives from President Bola Tinubu aimed at encouraging investment in the oil sector.
NUPRC has cautioned that “bids submitted below the prescribed range shall be deemed non-compliant and shall not be evaluated.”
What you should know about the 2025 round
Nigeria launched its 2025 oil and gas licensing round earlier this month, targeting up to $10 billion in new global investments.
A total of 50 blocks across onshore, shallow water, and deepwater terrains are on offer. NUPRC estimates that these assets could boost Nigeria’s oil and gas reserves by 2 billion barrels once developed.
This round is the third since the PIA came into force. Unlike the previous two, it is the most significant, featuring more blocks, including some with vast gas resources.
The 2024 round offered just 24 blocks across onshore, shallow water, and deep offshore terrains, and saw strong local participation.
Out of 25 winning companies, ExxonMobil, TotalEnergies, and Chevron were among the notable foreign winners, alongside Nigerian firms such as Dangote Petroleum, Seepco, Seplat, and Geil.
So far, major international oil companies including TotalEnergies and Chevron have publicly expressed interest in the ongoing round.
During a recent visit to NUPRC chief executive Gbenga Komolafe in Abuja, Chevron’s country director for Nigeria, Jim Swartz said:
“We will participate in the next licensing round. Our intention is to continue to grow in Nigeria.”
