2025 licensing round: FG rules out refunds, discretionary awards

…slashes work guarantee to 1%

The Federal Government has drawn a firm line in the sand as it kicks off the 2025 Oil and Gas Licensing Round, declaring an end to the era of discretionary awards and explicitly ruling out refunds, exchanges, or post-bid adjustments for acquired assets.

At a high-stakes Pre-Bid Conference held in Lagos, the government reaffirmed its commitment to transparency and strict adherence to the Petroleum Industry Act (PIA), warning investors that assets are offered strictly based on provided data and that signature bonuses remain non-refundable by law.

Setting the tone for the exercise, the Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mrs. Oritsemeyiwa Eyesan, described the licensing round as a major milestone and a test of the reforms embedded in the PIA.

While the government adopted a tough stance on due diligence, it simultaneously unveiled significant incentives to attract credible investors. Mrs. Eyesan announced that President Bola Ahmed Tinubu has approved a reduction in signature bonuses and certain pre–first oil fees to lower entry barriers.

In a major policy shift described as a game-changer for investors, the Commission announced a drastic reduction in the mandatory work programme guarantee, lowering it from 100 percent to just 1 percent to encourage participation while maintaining accountability.

Senior government representatives at the event emphasized that bidders must bear the sole responsibility for conducting due diligence regarding geological data, risks, and commercial viability before committing funds.

Authorities warned against speculative bidding by companies lacking the financial muscle to meet obligations, citing past instances where ill-prepared winners sought third-party financiers under disputed arrangements.

To mitigate this, the regulator encouraged bidders to form consortia, combining technical expertise with financial strength to ensure the successful development of the assets, which span onshore, shallow offshore, and frontier basins.

Mrs. Eyesan noted that the reforms have already spurred a rise in indigenous producers, though she acknowledged the accompanying challenges in infrastructure and financing.

She stressed that the 2025 bid round is designed to position Nigeria as a competitive destination for capital, particularly as recent outlooks by the IEA and OPEC project a continued global reliance on hydrocarbons.

The NUPRC boss assured stakeholders that the process would be conducted with absolute transparency, featuring live bid evaluations and strict enforcement of commitments, warning that non-compliant bidders would face immediate disqualification.

The legislative arm of government also threw its weight behind the process. In goodwill messages delivered on their behalf, both the Senate Committee on Gas and the House of Representatives reaffirmed the National Assembly’s support for the sector.

Lawmakers invited industry operators to submit memoranda on operational challenges, promising openness to legislative reviews that could further improve the PIA and the ease of doing business in the sector.