Oil block: FG cancels signature bonus to lure investors

In order to encourage new investments and increase oil production, the Federal Government announced yesterday the elimination of the need to pay a signature bonus when bidding for oil blocks.

The Minister of State for Petroleum Resources, Mr. Heineken Lokpobiri, shared this information while attending the 2024 Offshore Technology Conference (OTC) in Houston, Texas.

He said: “Historically, no source of energy goes away. So, do not be deceived that fossil fuel will go away. Discourse at the recent global conferences has further proved that fossil fuel will continue to remain, the quicker we extract our oil, the better for us as a country.

“We are here at OTC to show the rest of the world that Nigeria is different and our government is different, in creating the best regulatory framework, allowing competitiveness, and removing all the investment barriers.

“Today, we are restoring investment confidence in the sector and ensuring investors can bring in their funds without worries. This will show to the world that Nigeria is ready for business.

“Stakeholders had explained that globally, payable signature bonuses by awardees of an oil bloc or marginal field rank highest in Nigeria. On many occasions, the huge amount involved in payment of signature bonus was a setback for investors.

“Rather than pay such monies into the coffers of the Federal Government, the investor must now be able to prove to us that they have the funds required to move into exploration.

“What we have resolved going forward and with the 2024 oil bid round is to see that fields won in a bid round must be put into immediate use as against what obtained in past where fields are left idle after assets are won.”