By Bassey Udo
Prospective bidders in the 2025 Oil Licensing Round risk disqualification if found at any point in the bidding process if they are found to be either indebted to the Federal Government or insolvent.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which is superintending over the bid process, said bidders who were awarded licence(s) or lease(s) during previous licensing rounds, but failed to vigorously operate such assets in a business-like manner in accordance with applicable laws and guidelines also risk being sanctioned.
In a special publication providing answers to frequently asked questions pertaining to the licensing round, the apex upstream petroleum industry regulator said guidelines on the process released on the official bid portal in its website have spelt out grounds for ineligibility of prospective bidders.
Although the guidelines said the bid exercise, which is open to all qualified applicants and non-discriminatory to both local and foreign companies, those whose applications are not compliant with stipulated guidelines and laws, including the payment of the mandatory non-refundable application fees, would not be allowed to participate in the bid.
Under the stipulated guidelines, prospective foreign bidders do not require any registration in Nigeria as a business concern to participate in the bid, although the law says the Petroleum Prospecting License (PPL) shall only be awarded to such a company after it has been duly registered under the Companies and Allied Matters Act (CAMA) as stipulated in the Petroleum Industry Act (PIA).
All applicants, the NUPRC said, are expected to provide all information required for either the pre-qualification or actual bid stages of the process, as only applicants adjudged to have met these requirements would be qualified and shortlisted to proceed to the Confidentiality Agreement signing stage of the bid process.
Shortlisted pre-qualified applicants, the Commission said, shall be required to submit their technical and commercial bids for evaluation in accordance with the regulation, guidelines, and any other bidding documents issued by the Commission.
Winners of the bids are expected to emerge at the end of a five-stage process involving announcement/advertisement/portal launch, which was achieved since December 1; registration/prequalification of prospective bidders; submission/evaluation of technical and commercial bids; commercial bid conference, and final ministerial approval and contract award.
The timeline of the bid process, which would take about eight months to conclude, commenced on November 17, 2025 and to end on July 17, 2026, after the commercial bid conference, at the end of which the highest bidders and winners would be declared.
During the bid exercise, qualified bidders would be jostling to acquire any of the 50 Petroleum Prospecting Licenses (PPLs) included in the basket of oil blocks on offer by the Commission.
The 50 oil blocks on offer, which spread across the Onshore, Shallow Water, and Deep Offshore areas, include 2A29, 2A30, 2A31, 2A32, 2A33, 2A34, 2A35, 2A36, 2A37, 2A38, 2A39, 2A40, 2A41, 2A42, 2A43, 2A44, 2A45, 2A46, 2A47, 2A48, 2A49, 2A50, 2A51, 2A52, 2A53, 2A54, 2A55, 2A56, 2A57, 2A58, 2A59, 2A60, 2A61, 2A62, 2010, 307, 308, 309, 700, 701, 702, 703, 800, 801, 802, 803, 900, 901, 902, and 903.
The NUPRC said prospective bidders, whether participating individually or as a member of any consortium, shall submit applications for not more than two oil blocks across all terrains, as any violation of this provision would attract serious sanctions, including instant disqualification.
“Participation in more than one consortium shall count towards this limit. For the avoidance of doubt, where a company has equity, direct or indirect ownership, or management involvement in multiple consortium vehicles, all such applications shall be aggregated and treated as a single bidder’s applications,” the Commission said.
The winners of any of the PPLs, the Commission said, would operate it for an initial duration of three years, with a possible extension for another three years for onshore and shallow waters, and five years for deep water and frontier basins.
The PPLs confers on their winners the right to enjoy either the exclusive right to drill exploration and appraisal wells, or non-exclusive right to carry out petroleum exploration operations within the area provided for in the licence.
In addition, the winner would also enjoy the right to carry away and dispose of crude oil or natural gas either won or extracted during the drilling of exploration or appraisal wells as a result of production tests.
On the objectives of the 2025 Licensing Round, the Commission listed them to include the need to grow Nigeria’s oil and gas reserves; enhance Nigerian content development; attract Foreign Direct Investment (FDI) to the industry; contribute to a long-term global energy sufficiency; boost Nigeria’s oil and gas production capacity; expand the opportunity for domestic gas utilization and exports; create job opportunities, as well as create value for the Nigerian government and investors.
To create awareness of prospective investors around the world about the bid round, the Commission said it was planning road shows for Lagos on January 14, 2026; Dubai, United Arab Emirates (UAE) for January 26, 2026; Singapore for January 30, 2026; Beijing, China for February 3, 2026, and Houston, Texas, for February 12, 2026.
To effectively participate in the bid process, prospective bidders are required to mandatorily provide its incorporation documents; consortium agreement (in case of companies applying as a consortium); profiles of the company’s promoters/management team; three years tax clearance certificate; evidence of financial capacity and technical competence.
Before deciding to participate in the licensing round, prospective applicants must give serious considerations to its technical competence to operate in the upstream sector of the oil and gas industry as well as its financial viability and capacity to deliver value from the asset when awarded.
The applicant’s technical competence would be evaluated based on its work experience geological and geophysical capabilities, drilling and well engineering, reservoir evaluation and management, production engineering and technology, development planning and facilities engineering and management.
For an applicant to be considered serious, its promoters must be able to submit a bid backed up with signature bonus valued at an average of $3 million and $7 million as approved by the minister of petroleum for the reduction of entry barriers.
Bids submitted below the prescribed signature bonus threshold shall be deemed non-compliant with the guidelines and therefore not legible for consideration for technical evaluation.
Technical evaluation of bids would take into account the signature bonus, work programme, production unit cost per barrel with reference to the work programme, professionalism, human and technical capacity, percentage of available bank guarantee, balance sheet, turnover, green story and decarbonisation programme as well as corporate governance structure.
Where two or more bidders submit matching highest bids for a block within the prescribed signature bonus range, they would be subjected to a tie-breaking process, which would require the affected bidders submitting sealed re-bid of the signature bonus, which may be higher than the prescribed range.
To demonstrate financial capacity, each bidder must show evidence of a minimum financial base of an average annual turnover of $100m for deep offshore blocks and $40m for onshore and shallow water blocks or equivalent in minimum cash in bank respectively, while parent companies of newly incorporated companies are to submit a guarantee of like value for their interested terrain.
Newly registered companies, consortia or special purpose vehicles are legible to participate in the licensing round, provided their shareholders, or consortia members the pre-qualification criteria spelt out in the bid guidelines.
All requests to upload additional bid documents on the bid website shall not be entertained after the portal has been closed, as the automated process cannot be accessed once the portal has been closed.
Because the oil and gas industry business is largely conducted in dollars, prospective bidders are not allowed to pay their signature bonus in Naira.