Nigeria cuts the NUPRC signature bonus to 3–7 million dollars to ease entry barriers as the 2025 licensing round begins

The Nigerian Upstream Petroleum Regulatory Commission, led by its Chief Executive, Gbenga Komolafe, announced in an official update that the Federal Government has reduced the NUPRC signature bonus to three million and seven million dollars as the 2025 licensing round commences.

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The commission said the reduction was approved by the Minister of Petroleum to ease entry barriers for investors seeking access to the new oil blocks on offer.

It urged prospective bidders to submit offers only within the revised range.

The latest adjustment follows a sweeping policy change in 2024, when the government cut signature bonuses from about two hundred million dollars to ten million dollars after benchmarking similar charges in countries such as Brazil.

Komolafe explained that the earlier reduction was informed by a comparative study of global practices, which showed the need to create a more competitive environment for investors.

A signature bonus is a non-refundable payment made when a firm is awarded an oil or gas asset.

According to the commission, deepwater assets will now attract seven million dollars, while shallow water and onshore fields are set at three million dollars.

The payment must be made in United States dollars, as the designated account does not accept naira.

The regulator said successful bidders will receive a Petroleum Prospecting Licence granting exclusive rights to drill exploration and appraisal wells, undertake approved exploration activities and dispose of crude oil or natural gas obtained during test production.

The licence is valid for three years, with a possible three-year extension for onshore and shallow water areas, and five years for deepwater and frontier locations.

The commission outlined a two-stage bidding process comprising a qualification stage and a bid stage.

Interested companies or consortia must first submit applications that meet regulatory requirements before shortlisted applicants proceed to submit technical and commercial bids.

Shortlisted bidders will also be required to sign a Confidentiality Agreement.

The regulator warned that no bidder may apply for more than two assets in total, whether acting alone or through multiple consortium arrangements.

It said any direct or indirect ownership across several consortium vehicles will be aggregated and treated as a single application.

Fifty blocks across onshore, shallow water and deep offshore terrains are available in the current round.

They include licences from PPL 2A29 to PPL 2A62, as well as PPL 2010, PPL 307 and others in designated clusters such as PPL 900, PPL 901 and PPL 903.

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Industry analysts say the decision could attract broader investor participation and stimulate exploration activity, describing the updated terms as a powerful signal of Nigeria’s commitment to revitalising its upstream sector.