Nigerian Upstream Regulator Reduces Oil Blocks Signature Bonus
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has set the signature bonus for oil blocks to between $3 million and $7 million in the ongoing 2025 petroleum licensing round.
A statement by the Commission said the move was to lower the usual barriers to entry and was in line with global best practices.
In 2024, the government reduced the signature bonus payable by successful bidders from around $200m to $10m. The NUPRC disclosed that an investment in deepwater would attract $10m as a signature bonus, while shallow water and onshore would attract $7m.
The Chief Executive of the Nigerian Upstream Regulatory Commission, Gbenga Komolafe, stated that the NUPRC surveyed what other countries like Brazil demand as signature bonuses from would-be investors and discovered the need to slash that of Nigeria.
A signature bonus is a non-refundable payment made by a contractor to the government upon the signing of an agreement. Firms that are awarded oil or gas assets are expected to pay signature bonuses to the government.
According to NUPRC, the licensing round sought to boost Nigeria’s oil and gas production; expand opportunities for gas utilisation; create job opportunities; and create value for the Nigerian government and investors.
The broad objectives of the exercise included: to grow Nigeria’s oil and gas reserves; enhance Nigerian content development; attract Foreign Direct Investment (FDI); as well as contribute to a long-term global energy sufficiency.
Winners of the 50 Petroleum Prospecting Licenses (PPLs) will have the right to carry away and dispose of crude oil or natural gas won or extracted during the drilling of exploration or appraisal wells as a result of production tests.
NUPRC informed that there are 50 blocks covering the onshore, shallow water, and deep offshore areas. Nigeria Reduces Oil Block Signature Bonus Naira for Dollar Rate Drops Slightly in Forex Markets
