Foreign Bidders In 2025 Oil Round Must Incorporate Locally Within 90 Days

Foreign oil companies bidding for any of the 50 blocks on offer in Nigeria’s 2025 oil licensing round must establish local subsidiaries within 90 days of receiving award offers, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The NUPRC in its “Nigeria 2025 Licensing Round Guidelines” stated: “An Applicant may be a foreign company. However, by virtue of the CAMA, a PPL may only be awarded to companies duly incorporated and validly existing in Nigeria. Thus, foreign companies that qualify for an award shall be required to incorporate a company in Nigeria before a Block is awarded.”

This rule allows foreign bidders to participate without prior Nigerian registration but enforces swift compliance post-qualification.
The policy supports the Petroleum Industry Act 2021 by promoting indigenous participation across 50 blocks, including 35 in the Niger Delta and 15 in frontier basins.

NUPRC aims to boost reserves and production through aggressive exploration and gas development, aligning with energy transition goals. Bidders must register by February 20, 2026, via br2025.nuprc.gov.ng, proving financial capacity like US$100 million turnover for deep offshore assets.
A two-stage process—prequalification and bid evaluation—ensures transparency under Extractive Industries Transparency Initiative standards.

Joint ventures require a designated operator with at least 30 per cent stake for operational efficiency.

This 90-day deadline reinforces local content mandates, potentially accelerating investment while safeguarding Nigerian interests amid global energy shifts.

The Awards are slated between July and October 2026, following ministerial approval
Companies can enter the competitive bidding process without the upfront cost and commitment of local incorporation, but must demonstrate serious intent by establishing subsidiaries if awarded licenses.
The tender covers 35 assets in the prolific Niger Delta basin, including 16 onshore blocks, 18 in shallow waters and one deepwater prospect. An additional 15 blocks are located in frontier basins, including Benin, Anambra, Benue and Chad, representing higher-risk exploration opportunities with limited geological data.

Lowered barriers
In what appears to be a concerted effort to boost participation, the commission has significantly reduced several financial barriers.
Work programme security requirements have been slashed from a previous minimum of 100 per cent to “not less than one per cent,” though the regulator emphasised that “work programme commitments remain fully binding and enforceable post-award.”
Signature bonuses range from $3m to $7m per asset, payable within 60 days of receiving offer letters. While higher bonus payments score favourably in the evaluation process, “awards will be based on overall bid strength,” the commission noted.

Applicants face a relatively modest entry cost, with a $10,000 expression of interest fee and a $25,000 application fee per asset.

Companies may bid for a maximum of two assets, with each evaluated independently. “Any bid submitted in excess of this limit shall be deemed invalid and disqualified,” regulators warned.

Consortium flexibility
The licensing round permits consortium arrangements, provided participants submit valid agreements, appoint authorised representatives and designate an operator holding at least 30 per cent participating interest.

In a notable flexibility, “a consortium may be formed after the pre-qualification stage but before the submission of a commercial bid, with other pre-qualified candidates, subject to the Commission’s approval.”

However, the commission has established safeguards for consortium arrangements. Where “any of the consortium members is in default and renders the operation of the asset impossible, the defaulting member’s participating interest in the consortium will be revoked and redistributed among the remaining members.”

Targeted incentives
The commission stressed that fiscal incentives under the 2025 round are “targeted, not blanket concessions,” focused on greenfield developments, particularly non-associated gas projects, and deepwater ventures requiring substantial capital and extended development timelines.

Successful bidders must choose between concessionary arrangements, under which the federal government reserves a back-in right of up to 60 per cent, or production sharing contracts where state-owned NNPC Limited acts as concessionaire with the winning bidder serving as contractor.

Data availability varies significantly across the assets. Blocks in mature basins benefit from established seismic and well data, while frontier assets “may carry higher subsurface uncertainty due to limited or absent data coverage,” the commission acknowledged.

Applicants can only acquire geological data from approved sources, including the National Data Repository and licensed providers TGS ASA and TGS-PetroData, with violations subject to penalties.

The transparent disclosure of data limitations and the flexible incorporation timeline signal Nigeria’s recognition that attracting international capital requires balancing regulatory requirements with commercial pragmatism in an increasingly competitive global market for upstream investment.