Nigeria 2025 Licensing Round: What Investors Need To Know

Introduction

In November 2025, the Nigerian Upstream Regulatory Commission (the "NUPRC") announced the commencement of the 2025 Licensing Round from December 1, 2025 (the "Licensing Round"). The Licensing Round is aimed at unlocking undeveloped and fallow fields across deep offshore, shallow water and onshore areas. ¹

To achieve these objectives, the NUPRC issued guidelines for the Licensing Round (the "Guidelines") which set out the formalities and requirements for participation in the bid process. We set out below the key requirements for potential investors interested in participating in the Licensing Round.

Stages

The Guidelines involve multiple stages commencing with registration, then pre-qualification (based on legal, financial, technical and HSE (health, safety and environment) criteria), data collation, bid submission, bid evaluation and final award. The Guidelines provides for a transparent process in line with the provisions of the Petroleum Industry Act, 2021 ("PIA").

Applicants must register on the Licensing Round portal. Registration fee of US$10,000 is payable for all terrains of blocks. All applications alongside the supporting documents are required to be submitted electronically no later than 4:30 p.m. on February 27, 2026.² The supporting documents include statutory declarations and formal attestations (including beneficial ownership declaration form), bank guarantees, financial statements, corporate documents, and tax clearance certificates, in each case either in their original form or as certified true copies.³ A single consolidated affidavit may be submitted to authenticate all declarations and attestations required to be submitted for an application, and such affidavit must expressly refer to such declarations.

Pre-qualification Requirements

The first stage is for interested applicants to register and submit application on the portal set up by the NUPRC by providing required legal, technical and financial information. Applicants who satisfy the financial, technical, legal and HSE (health, safety and environmental) criteria are pre-qualified to participate in the bid. Where an applicant is a consortium, each member of the consortium will be required to satisfy the legal and financial requirements and at least one member of the consortium, who shall be designated as the operator, shall be required to satisfy each of the legal, financial, technical and HSE performance criteria.⁴

The financial criteria required to pre-qualify for the bid include verifiable evidence of funds by the applicant or members of the consortium jointly to finance deep offshore, onshore and shallow waters petroleum operations as shown by any of the following: (A) minimum average turnover or cash in bank of US$100 million for deep offshore blocks and US$40 million for onshore and shallow water blocks or (B) bank guarantee to the tune of US$100 million for deep offshore blocks and US$40 million for onshore and shallow water blocks.⁵

On the technical criteria, the applicant or the operator, in the case of a consortium, is required to show evidence of at least three (3) years experience in geological and geophysical works, drilling and well engineering, production engineering and technology and reservoir evaluation and management in deep offshore, onshore and shallow waters operations.⁶

On the legal criteria, while foreign companies can submit bids, award will only be made to companies duly incorporated and validly existing in Nigeria, with proven technical and financial capacity.⁷ The applicant and each member of the consortium, in the case of application by a consortium, is required to submit all corporate documents showing among others, evidence of due registration, particulars of the directors, shareholders and beneficial ownership of the entity.⁸

Other Requirements

Companies that intend to participate in the Licensing Round must be incorporated no later than February 27, 2026. Where companies bid as a consortium, the consortium agreement must identify the lead member and specify the roles of each member. A power of attorney authorising the lead member to represent the consortium must be issued.⁹ The consortium's bid must include a letter notifying the NUPRC of the designated operator, which must hold at least thirty per cent (30%) participating interest in the consortium. ¹⁰

Data on Blocks

Upon pre-qualification, applicants are required to purchase data from the National Data Repository and other approved vendor and comply with stipulated confidentiality obligations. ¹¹ The data will relate to geological, geophysical, operational and well information on the blocks. All data provided by the NUPRC is supplied 'as is' without any representation from the NUPRC concerning their accuracy. Reliance on such information is solely at the bidder's risk. ¹²

Disqualification

The NUPRC may disqualify a pre-qualified applicant at any time if it or any of its shareholders, directors or beneficial owners: (a) presents or has previously presented false information or forged documents in respect of any bid or tender process with the Federal Government; (b) commits a breach of the terms and conditions of any licence or agreement with the NUPRC, the midstream and downstream regulator, or the Federal Government in relation to petroleum operations in Nigeria; (c) is or becomes Insolvent; (d) presents more than one bid for the same licence in any capacity; (e) has the same shareholders or are formed by the same persons as another company participating in the bid process for the same licence or lease; (f) undergoes a change of control except with the consent of the Minister of Petroleum Resources; (g) has been or is found guilty of an offence which raises doubts about the professional integrity and financial viability of the applicant, its shareholders, members or directors; (h) is indebted to or has its assets taken over by Asset Management Corporation of Nigeria; (i) has not met its tax and other statutory payments obligations; or (j) is not in all respects acceptable to the Federal Government. ¹³

Post-Qualification: Bid Submission

Qualified bidders must submit the technical bid, commercial bid, and bid guarantee, and mark them separately as required by the Guidelines. Evidence of payment of bid fee of US$25,000 per block and data purchase must also be submitted.¹⁴ Separate bid must be submitted for each block. Bidders (including a member of a consortium) cannot apply for more than two (2) blocks on offer. Where this limit is exceeded, all such additional bids in chronological order of submission will be deemed invalid and disqualified. The NUPRC may also impose sanctions for such non-compliance.¹⁵

Bids submitted will be valid and open for acceptance by the NUPRC for a period of four (4) months from the bid submission deadline communicated by the NUPRC (the "Bid Validity Period"). Where two (2) or more bidders obtain identical scores following bid evaluation, they will be required to participate in a tie-breaking process by submission of a re-bid. ¹⁶

Requirements of Bid Guarantee

1. Bidders must submit a bid guarantee constituting five per cent (5%) of the prescribed signature bonus¹⁷ alongside the bids in the form of an on-demand payment bond valid for 120 days after the commercial bid conference or as agreed between the NUPRC and the bidder. The bid guarantee must be issued by an international or Nigerian bank with a "BBB" rating.¹⁸ The bid guarantee must reflect the standard language stipulated in the Guidelines. A parent company of a bidder that meets the aforementioned rating may instead issue parent company guarantee at the NUPRC's sole discretion. ¹⁹
2. Forfeiture: A bid guarantee will be forfeited without notice or demand where the bidder (a) withdraws its bid before the Bid Validity Period elapses; (b) is found to have committed any corrupt, coercive, fraudulent or obstructive practice, or collusion to affect the outcome of the bid process; (c) refuses or fails to enter into negotiations with the NUPRC. Such forfeiture will also apply where the bid is found to contain false statement or material misrepresentation.²⁰
3. Extension of Term: Where the Bid Validity Period is extended, the bidder must procure the consequential extension of the Bid for an additional twenty-one (21) days after the expiry of such extended period.²¹ Further, upon the declaration of a preferred bidder, such bidder will be required to provide a letter to the NUPRC extending the Bid Validity Period and the bid guarantee until the payment of the signature bonus.²²

Evaluation of Bid

1. Technical evaluation: This will be conducted based on the criteria prescribed by the NUPRC in the Licensing Round package. ²³ A bidder must submit details of its work experience and the proposed work plan for the block of interest.²⁴
2. Commercial evaluation: The NUPRC will only open the commercial bid of bidders who have satisfied the technical criteria.²⁵ This stage involves evaluation of the outcome of the technical bid, signature bonus, and work programme commitment.²⁶ Proposed work programme must be submitted for each block and supported by a work performance security in form of a bank guarantee, letter of credit or performance bond issued by a bank acceptable to the NUPRC for an amount determined by it.²⁷ The winning bid for a block must have the highest score and demonstrate the best overall value to the Government in the long term in terms of alignment with the Government's objectives of increased reserves and daily production as well as applicable fiscal and other benefits.²⁸

Government Participation

In line with the provision of the PIA, the Government, through the Nigerian National Petroleum Company Limited ("NNPC Ltd"), has the right to participate in up to sixty per cent (60%) of a licence.²⁹ NNPC Ltd may only take over the operatorship of the asset where voluntarily surrendered by the operator upon negotiation. ³⁰

Post-Award Obligations

Upon publication of the winning bidder and the reserve bidder by the NUPRC, an offer letter to be winning bidder will be issued within fourteen (14) days of the commercial bid conference. Payment of the signature bonus must be made within sixty (60) days of receipt of the letter.³¹ Further, prior to the grant of the licence and within ninety (90) days from receipt of the letter, the winning bidder must provide the NUPRC with: (a) the parent company guarantee (if applicable), (b) the work commitment programme, (c) the applicable fee, (d) evidence of payment of rent first year, (e) evidence of payment of the signature bonus, and (f) affidavit confirming its solvency and good standing as well as that of its directors.³² The successful bidder's failure to fulfil these conditions within the stipulated timeframe will render the bid unsuccessful.³³

Critical Sensitivities for Investors

With the pre-bid conference set to hold on January 14, 2026, potential bidders and investors should note the following key points:

1. bidders and their officers must ensure that they are not involved, directly or indirectly, in any corrupt and unethical practice throughout the bid process; ³⁴
2. bidders should ensure their work programmes align with the legal requirements stipulated in the applicable NUPRC regulations, ³⁵ demonstrate strong governance structures, and reflect environmental, social and governance considerations;
3. bidders should prioritize securing early commitments from credible financiers and forging strategic partnerships in order to meet the financial and technical requirements for a successful bid;
4. house-keeping issues such as regulatory compliance and tight documentation (such as joint venture agreements) should be addressed timeously; and
5. bidders and potential investors should leverage the information provided in the data room and throughout the bid process to carefully assess the viability of the target blocks and make informed investment decisions.

Footnotes

1 See https://www.nuprc.gov.ng/nuprc-announces-2025-licensing-round-to-harness-undeveloped-fields/

2 Paragraph 11.2, the Guidelines. Bidders and potential investors should watch out for any change in date or requirements stipulated in the Guidelines, as NUPRC may amend or update the Guidelines before the window for application or bid submission closes.

3 Paragraph 11.4, the Guidelines.

4 Paragraph 12.1(a), the Guidelines.

5 Paragraph 12.2(a), the Guidelines.

6 Paragraph 12.3, the Guidelines.

7 Paragraph 6.2, the Guidelines.

8 Paragraph 12.4, the Guidelines.

9 Paragraph 6.4(c), the Guidelines.

10 Paragraph 6.4(e), the Guidelines.

11 Purchase of data attracts US$10,000 per block.

12 Paragraph 7.7, the Guidelines.

13 Paragraph 14.1, the Guidelines and Regulations 11 of the Petroleum Licensing Round Regulations, 2022.

14 Paragraph 17.2, the Guidelines.

15 See generally, paragraph 17.5, the Guidelines.

16 Paragraphs 16.7 and 17.6(h), the Guidelines.

17 A signature bonus is a payment made to the Government for, and payable before, the grant of a petroleum prospecting licence or petroleum mining lease. The signature bonus ranges from US$3 million to US$7 million for the blocks on offer.

18 This may be from S&P Global, Fitch Ratings or Moody's (for an international bank), or from GCR, Augusto &Co, AM Best, or Data Pro (for a Nigerian bank).

19 Paragraph 17.7(a), the Guidelines.

20 Paragraph 17.7(f), the Guidelines.

21 Paragraph 17.7(g), the Guidelines.

22 Paragraph 17.7(h), the Guidelines.

23 Paragraph 17.6(b), the Guidelines.

24 Paragraph 19.1(b), the Guidelines.

25 Paragraph 19.2(a), the Guidelines.

26 Paragraph 19.2(b), the Guidelines.

27 Paragraph 22, the Guidelines.

28 Paragraph 19.2(c), the Guidelines.

29 Paragraph 23(1), the Guidelines, and section 85(4)(a), the Petroleum Industry Act, 2021.

30 Paragraph 23(2), the Guidelines.

31 Paragraph 19.2(i) and (j), the Guidelines

32 Paragraph 19.2(k), the Guidelines

33 Paragraph 19.2(l), the Guidelines

34 Paragraphs 17.7(f)(iii) and 27, the Guidelines.

35 See our article titled 'Aligning Work Plans and Budgets to Achieve Production Targets: A Commentary on the Nigerian Upstream Petroleum (Commercial) Regulations, 2025'.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.