Client Update – NUPRC sets Ground Rules for 2025 Oil, Gas Blocks Licensing Round in Nigeria

I.      INTRODUCTION

The Nigerian Upstream Petroleum Regulatory Commission (‘NUPRC’ or the ‘Commission’) recently announced its plans to offer fifty (50) oil and gas blocks across onshore, shallow water, and deepwater terrains in Nigeria under the 2025 Licensing Round. The bidding process will be concluded within an eight (8) months period beginning on 17th November 2025 and ending on 17th July 2026, after the commercial bid conference.

The successful bid(s) or winner(s) of the licensing round will be awarded a Petroleum Prospecting Licence (‘PPL’) pursuant to the provisions of the enabling law the Petroleum Industry Act, 2021(‘PIA’). The PPL will confer the holder with amongst other rights, exclusive right to drill exploration and appraisal wells; and non-exclusive right to carry out petroleum exploration operations within the area provided for in the PPL. In terms of duration of the PPL, it is for an initial duration of 3 years, with a possible extension of another 3 years for onshore and shallow water blocks, while it is 5 years for deep water blocks and frontier.

II.   SALIENT TAKE AWAY FOR PROSPECTIVE PPL BIDDER(S)

i)    Eligibility Requirement to Bid for a PPL in the 2025 Licensing Round

The 2025 Licensing Round exercise is open to both local and foreign companies. A foreign company does not at the initial stage need to register a Nigerian subsidiary to participate in the bidding process.

However, the PPL shall only be awarded after such a company has been duly registered under the Companies and Allied Matters Act, 2020 (CAMA) as stipulated under the PIA. A newly registered company, consortium or special purpose vehicle (SPV), can participate in the 2025 licensing rounds, if its shareholders, or consortium members (as applicable) meets the pre-qualification criteria.

It is important to note that a Prospective PPL Bidder is, amongst other grounds listed in the 2025 Licensing Round Guidelines, disqualified from participating in the Licensing Round, if such a Prospective PPL Bidder or any of its members (i) is indebted to the Government; (ii) has not operated a previously awarded license or lease vigorously and in a business-like manner in accordance with relevant and applicable laws. (iii) is or becomes insolvent (iv) has not or does not comply with applicable law and industry standards etc.

ii)    Mandatory Documents for a Bid

In terms of key considerations before participating in the 2025 Licensing Round, a Prospective PPL Bidder must have (i) Technical Competence in the upstream sector of the oil and gas industry in Nigeria, and (ii) Financial viability and capacity as highlighted in paragraph 13.2 of the 2025 Licensing Round Guidelines.

The mandatory documents required by a Prospective PPL Bidder are - (i) Company Incorporation Documents (ii) Consortium Agreement in the case of companies applying as a consortium (iii) Profiles of the company’s Promoters/Management Team. (iv) Tax Clearance Certificate for the past three years, where applicable (v) Evidence of Financial Capability and Technical Competence.

iii)    Technical Competence Evaluation by the Commission

The Prospective PPL Bidder’s Technical Competence will be evaluated using work experience across the listed work areas – (i) Geological and geophysical capabilities (ii) Drilling and well engineering (iii) Reservoir evaluation and management (iv) Production engineering and technology (v) Development planning (vi) Facilities engineering and management.

iv)        Proving Financial Capability

The minimum financial capabilities for an entity seeking to participate in the 2025 Licensing Round are as follows - (i) Average annual turnover of USD$100,000,000.00 for deep offshore blocks and USD$40,000,000 for onshore and shallow water blocks or (ii) Minimum cash in bank of UD$100,000,000.00 for deep offshore blocks and USD$40,000,000.00 for onshore and shallow water blocks or (iii) Bank Guarantee to the tune of USD$100,000,000.00 for deep offshore; US$40,000,000.00 for onshore, and shallow water block or (iv) For newly incorporated companies, a parent company guarantee to tune of USD$100,000,000.00 in deep offshore, USD$40,000,000.00 in onshore and shallow water blocks.

v)       Signature Bonus and its Currency Denomination

The Commission in the released ground rules requires all Bidders to submit a bid within a range of $3 million and $7 million as approved by the Minister of Petroleum. Further, the designated Signature Bonus is to be paid in United States Dollars only.

Qualifications and Disclaimers: This Publication is prepared strictly based on the information released to the general public by the NUPRC for investment and informational purposes - https://br2025.nuprc.gov.ng/ . It should not be relied upon or serve as a substitute for proper legal advice. Counsel will not be held liable for any action or inaction that is premised strictly on this Client Update.

For Further Information, Please Contact –

Ikemefuna Stephen Nwoye, Esq. – Founder/Managing Counsel +2349033053175 (WhatsApp number)

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