The Commission gives idle oil licence holders October 31 deadline to clarify work impediments or face revocation
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced plans to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021 by revoking licences awarded for oil exploration that have remained dormant and failed to meet their statutory work commitments since the issuance.
In a circular dated September 14, 2026, signed by the Commission Chief Executive Oritsemeyiwa Eyesan, NUPRC gave holders of Petroleum Prospecting Licences (PPLs) awarded under the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round, and the 2024 Licensing Round, October 31, 2026, deadline to declare any impediments preventing them from meeting their statutory work commitments or face enforcement of the “drill-or-drop” provisions of the PIA 2021.
The Commission reaffirmed its mandate to ensure that licensed acreages are actively worked and petroleum operations are conducted diligently and in a businesslike manner.
NUPRC reminded oil licensees of their statutory work commitments, including the timely execution of approved work programmes.
“The Commission reiterates that the PIA proceeds on a simple principle: acreage is held to be worked, and acreage that is not worked within its term returns to the Federal Government,” the circular stated, citing sections 77, 78, 88, 96, and 97 of the PIA.
The Commission warned that it intends to enforce these provisions against all non-performing acreage, including by refusing licence extensions, requiring relinquishment, calling in work performance securities, and commencing revocation proceedings.
However, the NUPRC emphasised that its objective is to increase production, not forfeiture.
“The Commission recognises that fulfilment of obligations under the licence may be affected by challenges of financing, rig availability, security, host community engagement, infrastructure, regulatory approvals and partner arrangements, and it is willing, within the limits of the law, to assist licensees in resolving them,” the circular noted.
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To that end, it said that licensees experiencing such constraints are encouraged to notify the Commission no later than October 31, 2026, stating their level of compliance with licence obligations, the specific constraints affecting execution, and proposed mitigation measures and revised implementation timelines.
The upstream regulator, however, made it clear that it will not assume jurisdiction beyond its statutory mandate, displace any agreed dispute-resolution mechanism or the jurisdiction of the courts, or permit engagement with the Commission to suspend the term of a licence or excuse the performance of any obligation.
The circular also stressed that partner disputes can delay acreage development, urging licensees to ensure that partnership and financing agreements clearly address participating interests, operatorship, deadlock, cash calls, default, assignment, and change of control.
It said all enquiries are to be directed to Bashari Indabawa, Executive Commissioner, Exploration and Acreage Management, at indabawa.b.a@nuprc.gov.ng.
The move is seen as part of the Federal Government’s broader drive to boost oil production and ensure that awarded acreages are not left idle.
Industry watchers say the October 31 deadline will test the resolve of the Commission to enforce the drill-or-drop provisions, which have long been a thorn in the side of regulators seeking to maximise the nation’s petroleum resources.
Pinnacle Daily recalls that NUPRC concluded the 2025 Licensing Round in July, where 37 oil and gas blocks were awarded to 31 companies that won the bids. A total of 143 companies submitted 200 bids for the available blocks. Out of 50 blocks originally put on offer across diverse terrains, 37 received successful bids, and 13 received no bids. Eyesan subsequently announced that the unbidded blocks would be returned to the national licensing pool.
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.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X