NewsFG Abolishes Payment Of Signature Bonus By New Investors In Oil, Gas...

FG Abolishes Payment Of Signature Bonus By New Investors In Oil, Gas Sector

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May 8, (THEWILL)- The Federal Government has announced the abolition of Signature Bonus Payment by new Investors in the Oil and Gas Sector.

Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), disclosed this on Monday, in an interview with Journalists on the sideline of the 2024 Offshore Technology Conference (OTC), in Houston, Texas.

THEWILL reports that the Signature Bonus is a single, non-recoverable lump sum Payment by the License Holder to the Government upon the granting of a Petroleum Exploration Licence.

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According to the Minister, over the years, the payment of Signature Bonuses remains a huge bottleneck for Investors.

“Stakeholders had explained that Globally, payable Signature Bonus by Awardees of an Oil Bloc or Marginal Field rank highest in Nigeria”, he said, adding on many occasions, the huge amount involved in payment of Signature Bonus was a setback for Investors.

Lokpobiri said to ensure Investors had a soft landing, such payments would now be tied to immediate Exploration and Production Activities by the new Entrants.

“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 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”, he explained., adding that the new Strategy would ensure the creation of Jobs and boost activities in the Upstream Oil Sector.

The Oil Minister, who said the quickest way toward Economic Recovery for Nigeria is through Oil and Gas Investment, emphasised that the Country’s huge Oil and Gas Deposit would mean nothing if they remained on the ground and were not explored.

Lokpobiri reiterated that when the Government of President Bola Tinubu came on board, he took some Strategic Initiatives in the Sector, which is today changing the Narrative. He urged investors to take the opportunity of the Oil Bid Round to make an Investment.

He assured Investors that Oil would remain relevant for a long time and that the Federal Government was creating an Enabling Environment that would attract the best Investment in the Country.

“Historically, no Source of Energy goes away. So, do not be deceived that Fossil Fuel will go away. Talks at the recent Global Conferences have 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.

“Investors can bring in their Funds without worries. We are showing the World that Nigeria is ready for Business”, he added.

Gbenga Komolafe, Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission ( NUPRC); Uchechukwu Ogah, former Minister of State for Solid Minerals and Gabriel Ogbechie, Group Managing Director, Rainoil Limited are among the Attendees at the Conference. 

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