NUPRC
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a stern warning to holders of petroleum exploration and production licenses, declaring its commitment to strictly enforce the “Drill-or-Drop” provisions enshrined in the Petroleum Industry Act (PIA) 2021.
In a circular issued to industry operators, NUPRC Chief Executive, Mrs. Oritsemeyiwa Eyesan, urged holders of licenses awarded under the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round, and the 2024 Licensing Round to immediately fulfill their statutory obligations or risk losing their assets.
Eyesan warned that default on minimum work commitments would lead to severe regulatory actions, including the non-extension of licenses, mandatory relinquishment of acreages, enforcement of work performance securities, and the initiation of formal license revocation proceedings.
According to the circular (Reference No: NUPRC/1127/VOL.13/55), the regulatory crack-down aims to boost Nigeria’s crude oil production, optimize asset utilization, and reinforce the binding terms of issued licenses.
Eyesan emphasised that under the PIA, oil blocks are allocated strictly for active development rather than speculative holding.
“Non-performing acreage will return to the Federal Government,” Eyesan stated, noting that the principle is backed by Sections 77, 78, and 88 of the PIA, with default and revocation mechanisms governed by Sections 96 and 97.
“Continued possession of a licence depends on the licensee meeting the obligations attached to it within the stipulated period. It is performance of those obligations within the term that entitles a licensee to continue to hold the licence,” she added.
Ultimatum and Assistance Framework
To assess field performance, the NUPRC chief directed all affected licensees to submit detailed compliance reports to the commission no later than October 31.
Operators must outline the status of their approved work programs, highlight specific constraints such as financing bottlenecks, rig availability, security challenges, host community issues, or infrastructure deficits and present concrete mitigation plans alongside revised implementation timelines.
Despite the firm directive, Eyesan noted that the commission’s ultimate objective is to stimulate production rather than revoke licenses.
She assured operators that NUPRC remains open to supporting licensees in resolving operational hurdles, provided such interventions remain within the boundary of the law.
However, she cautioned that statutory timelines would not be suspended indefinitely while operators attempt to address their challenges.
“NUPRC will neither exceed its statutory mandate nor allow engagements to suspend licence terms,” Eyesan warned, adding that internal shareholder or joint-venture disputes among partners will not shield non-performing licensees from statutory enforcement.
The commission urged all affected field operators to adhere strictly to the October 31 deadline to avoid regulatory sanctions.
