NUPRC: Govt Slashes Oil Licensing Bonus to $3–7m

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced that the Federal Government has reduced the signature bonus for the 2025 petroleum licensing round to a range of $3 million to $7 million. The adjustment, disclosed in a statement issued on Monday, is part of ongoing reforms aimed at stimulating investment and improving competitiveness in Nigeria’s upstream oil sector.

A signature bonus is a one-time payment made by oil companies upon signing an agreement for the award of an exploration or production licence. It serves as an upfront revenue source for government and a prerequisite for beginning exploration activities. Nigeria has historically imposed higher signature bonuses, a policy that industry analysts say contributed to the declining interest of international oil firms in bidding rounds.

According to the NUPRC, the revised rate is intended to remove financial barriers that previously discouraged new entrants and smaller exploration firms from participating in the country’s licensing processes. The Commission emphasised that the approved range is now mandatory, warning that any bidder who submits a proposal outside the $3 million to $7 million threshold will face automatic disqualification.

The NUPRC stressed that the new framework aligns with global best practices and is designed to improve transparency, attract fresh capital, and enhance the competitiveness of Nigeria’s oil and gas sector amid rising international energy investments. The Commission added that the adjustment will help Nigeria regain its position as a leading destination for hydrocarbon exploration in Africa.

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Stakeholders say the reduced bonus could widen participation in the 2025 bidding round, especially among indigenous companies that typically struggle with high entry costs. Some experts argue that lowering the financial burden may accelerate exploration in frontier basins, including areas of the Niger Delta and inland basins that remain underexplored.

However, others caution that the cut must be accompanied by stronger regulatory stability, improved security in oil-producing regions, and clearer fiscal terms to guarantee long-term investor confidence. They note that while reduced signature bonuses may attract bidders, actual investment decisions depend on broader policy consistency and operational ease.

The NUPRC said further details on the 2025 licensing round, including timelines, modalities and qualification criteria, will be released soon. The Commission reaffirmed its commitment to ensuring a transparent process as Nigeria works to boost exploration activities and expand its crude oil reserves.