Oil Firms Commit Additional $23.8m in Competitive Bids
The competition for Nigeria’s oil and gas assets witnessed dramatic turns at the 2025 licensing round organised by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), as several companies committed millions of dollars in additional signature bonuses to break deadlocks and secure winning or reserve bidder positions.
An analysis of the bidding process and proceedings of the Commercial Bid Conference on Wednesday showed that intense tie-breaker contests were recorded for PPL 2A29, PPL 2A39, PPL 2A40, PPL 2A42, PPL 2A43 and PPL 2A51 after competing companies recorded the same aggregate scores at the end of the initial evaluation.
Under the licensing process, a tie does not produce joint winners. Rather, where two or more companies obtain the same aggregate score for a block, the affected bidders are invited to participate in a tie-breaker round by submitting fresh signature bonus offers.
The company with the highest additional signature bonus emerges as the preferred winner or the highest-ranked reserve bidder, while the remaining contenders are subsequently ranked according to the value of their revised offers.
The development highlighted the intensity of competition for the available oil and gas assets, as bidders were not only competing to secure blocks but were also willing to commit millions of dollars more to overcome deadlocks and improve their positions in the auction.
However, the companies have not yet paid the millions of dollars pledged as signature bonuses, as the amounts represent financial commitments made during the bidding process.
The successful bidders have 90 days to fulfil their payment obligations, failing which they risk forfeiting their bonds and losing the awarded blocks. In such an event, the reserve bidder in the second position will be given the opportunity to take over the asset.
In one of the most competitive contests, the bidding for PPL 2A42, a shallow-water block, ended in a tie after two companies submitted signature bonuses of $5m each. The tie was eventually broken by LexOil Nigeria Limited, which raised its signature bonus offer to $8.3m to emerge as the winning bidder.
The bidding process for PPL 2A43 also produced a tie for the position of reserve bidder one. Ocean Waves Group Limited eventually secured the position after declaring a signature bonus of $10m.
Another fierce contest was recorded for PPL 2A51, where three companies battled for reserve bidder positions. The companies involved were Rain Oil Limited, Gomax Global Concepts and Greenfield.
Greenfield emerged as reserve bidder three after submitting a $5.5m signature bonus, while Rain Oil Limited secured reserve bidder four with a $5m offer.
The competition was not limited to winning bids, as companies also battled to become reserve bidders, a position that could become crucial if the preferred bidder fails to complete the required process or withdraws from the transaction.
For PPL 2A29, an onshore block, Danem Oil Field and Energy Limited submitted a $2.1m signature bonus to become the reserve bidder. The bidding process for PPL 2A39, a shallow-water block, was won by Pivot GIS Limited with a signature bonus of $14.53m.
Similarly, Midwestern Oil and Gas Company Limited emerged as reserve bidder four for PPL 2A40, another shallow-water block, after submitting a $7.56m signature bonus. The individual bidding outcomes showed how the licensing round moved beyond a simple contest involving the highest initial offer.
In several instances, the final outcome was determined only after bidders were required to increase their financial commitments to break ties. The development also underscored the value companies attached to gaining access to Nigeria’s oil and gas acreage, particularly at a time when the Federal Government is seeking to attract fresh investments, increase production and unlock new reserves.
Speaking with journalists after the 2025 Commercial Bid Conference in Abuja on Tuesday, Eyesan explained that while 50 oil and gas blocks were offered during the licensing round, investors submitted bids for only 37 assets.
She said the successful assets are expected to unlock about 500 million barrels of crude oil reserves, approximately two trillion cubic feet of natural gas, and increase Nigeria’s crude production by 300,000 barrels per day, with about 100,000 barrels per day projected within the next three years.
According to Eyesan, the 37 successful assets have the capacity to significantly boost Nigeria’s reserves and production targets. She said, “Like we earlier mentioned, we are expecting almost 500 million barrels from these 37 oil assets. We have very limited gas assets in this bidding round. We have basically one or two prominent gas assets, and we are looking at about two trillion cubic feet of gas coming from this bid round.”
She added that the projects would contribute substantially to Nigeria’s production growth. “We now have these resources available to be developed. We also said in the presentation that we are expecting about 300,000 barrels of oil production per day from these assets. We are looking at 37 assets that can come into production in the next three years. At least in the next three years, we should be able to unlock about 100,000 barrels per day.”
The commission’s chief said the response from investors demonstrated renewed confidence in Nigeria’s upstream petroleum industry despite the absence of bids for some frontier assets. She disclosed that nearly 300 companies initially indicated interest in the licensing exercise before the number was reduced through various evaluation stages.
According to her, “When we started the journey, we got interest from almost 300 companies. I repeat, almost 300 companies. That, in my view, was an indication that the tide has turned for Nigeria.”
She explained that 196 companies passed the prequalification stage, while 143 companies eventually submitted about 200 commercial bids.
“From the almost 300 interests that we got, we moved to the prequalification stage, and that number was pruned down to 196. We have a total of 143 companies showing interest for about 200 bids. That, for us, was remarkable.”