The Nigerian government has lowered the signature bonus for oil blocks to between $3 million and $7 million as part of its 2025 petroleum licensing round. This reduction is intended to lower barriers to entry and bring Nigeria’s terms in line with global best practices. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced the new rates, which are dramatically lower than the previous range of around $200 million. After cutting the bonus from $200 million to $10 million in 2024, the NUPRC has now set a $10 million bonus for deep‑water projects and a $7 million bonus for shallow‑water and onshore investments. The commission based these figures on a survey of international practices, including those in Brazil.
A signature bonus is a non‑refundable payment made by a contractor to the government upon signing an agreement. The current licensing round aims to boost Nigeria’s oil and gas production, expand gas utilization, create jobs, and generate value for both the government and investors. It seeks to grow reserves, enhance local‑content development, attract foreign direct investment, and contribute to global energy sufficiency.
The NUPRC has offered 50 petroleum prospecting licences (PPLs) for bidding, covering onshore, shallow‑water, and deep‑offshore areas. Winners will obtain the right to extract and dispose of crude oil or natural gas during exploration or appraisal wells. The round is open to both local and foreign companies, with a minimum financial requirement of $100 million average annual turnover for deep‑offshore blocks and $40 million for onshore and shallow‑water blocks.
The commission also dismissed reports that it was withholding the Frontier Exploration Fund (FEF) from the Nigerian National Petroleum Company Limited (NNPC Ltd.). The NUPRC confirmed that it has approved $185 million and N14.9 billion for the fund, which is controlled by the Central Bank of Nigeria (CBN). Its role is to evaluate NNPC’s work programme before approving any release of the fund.
These reductions in signature bonuses and the licensing round are part of the government’s broader effort to revitalize the oil and gas sector and attract investment. The outcome of the round is expected to have a significant impact on Nigeria’s energy industry and economy. The NUPRC has pledged transparency and fairness, with the exercise scheduled to conclude within eight months.
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