Federal Government Announces Major Reduction in Oil Block Entry Costs
The Federal Government of Nigeria has implemented a significant reduction in entry costs for the upcoming 2025 oil licensing round. This strategic move aims to enhance transparency, increase crude oil production, and attract fresh investment into the nation's upstream petroleum sector.
Sharp Drop in Signature Bonuses
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed during a pre-bid webinar that signature bonuses for the licensing round have been lowered to a range of $3 million to $7 million. This represents a substantial decrease from the $10 million required in 2024 and a dramatic reduction from the nearly $200 million demanded in previous years.
According to the commission, this adjustment is designed to lower barriers to entry and shift the focus away from aggressive cash bids. Instead, emphasis will now be placed on technical capability, credible work programmes, financial strength, and speed to production.
Fifty Oil and Gas Blocks Available
A total of 50 oil and gas blocks are being offered in the delayed 2025 licensing round. The portfolio includes:
- 15 onshore assets
- 19 shallow-water blocks
- 15 frontier basin blocks
- 1 deepwater block
The government's objective through this exercise is to raise oil production from the current 1.5 million barrels per day to 2.7 million barrels per day by 2027.
Transparent Digital Bidding Process
Speaking at the pre-bidding conference in Lagos, NUPRC Chief Executive Officer Oritsemeyiwa Eyesan assured investors that the new framework would provide a transparent, predictable, and stable regulatory environment.
She emphasized that the licensing round would be fully digital, allowing investors to access data and submit bids through an online portal. Oversight will be provided by the Nigeria Extractive Industries Transparency Initiative (NEITI) and other government agencies to ensure accountability throughout the process.
Strategic Intervention for Energy Security
Eyesan described the licensing round as a strategic intervention to grow reserves, improve production, and strengthen Nigeria's energy security. She stressed that only firms with strong technical and financial credentials would be considered for the blocks.
"With the approval of President Bola Tinubu, signature bonuses for the 2025 licensing round are now set within a range of $3 million to $7 million to reduce entry barriers and place greater weight on what truly matters: technical competence, credible work programmes, financial capacity, and the ability to deliver production quickly," she stated.
She added that this decision reflects global capital mobility and Nigeria's need to remain competitive in attracting long-term upstream investors.
Five-Stage Process Under PIA 2021
The NUPRC outlined that the licensing round would follow a comprehensive five-stage process:
- Registration and pre-qualification
- Data acquisition
- Technical bid submission
- Evaluation
- Commercial bid conference
All stages will be conducted in strict compliance with the Petroleum Industry Act (PIA) 2021.
Technical Evaluation Criteria
In a technical presentation, NUPRC Director of Lease Administration, Exploration and Acreage Management Amber Ndoma-Egba explained that the round would span five sedimentary basins:
- Chad Basin
- Benue Trough
- Anambra Basin
- Bida Basin
- Niger Delta Basin
Technical evaluations will focus on subsurface understanding, exploration and development plans, sustainability, host community development, and lifecycle management. Ndoma-Egba emphasized that technically weak bidders would not advance in the process.
The commission has also approved a minimum work performance security of one percent to support investment, with bidders having the option to voluntarily increase this amount to improve their technical scores.
Targeting $10 Billion in New Investment
The NUPRC announced that the 2025 licensing round, officially launched on December 1, 2025, is targeting approximately $10 billion in new upstream investments. This initiative signals a re-engineered oil and gas sector focused on long-term value creation and sustainable development.
