The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has moved to enforce the “drill-or-drop” provisions of the Petroleum Industry Act 2021 against holders of non-performing oil exploration licences.
The commission gave affected licence holders until October 31, 2026, to disclose the level of compliance with their approved work programmes, identify constraints delaying operations and submit proposed measures and revised timelines for addressing the challenges.
The directive covers Petroleum Prospecting Licence holders awarded under the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round.
In a circular dated September 14, 2026, and signed by the NUPRC Chief Executive, Oritsemeyiwa Eyesan, the commission said the enforcement was part of the national drive to increase petroleum production by ensuring that licensed acreages are actively worked.
The NUPRC said it intended to enforce the statutory provisions against non-performing acreage, including by refusing licence extensions, requiring relinquishment, calling in work performance securities and commencing revocation proceedings.
It, however, stressed that its objective was “to increase production, not forfeiture.”
The commission said it recognised that licence holders could face challenges involving financing, rig availability, security, host-community engagement, infrastructure, regulatory approvals and partner arrangements.
It therefore encouraged companies experiencing such constraints to notify the commission by October 31, setting out their compliance status, the specific obstacles affecting their operations and proposed mitigation measures.
The NUPRC said a petroleum prospecting licence is granted for a defined initial exploration period, with any extension dependent on the terrain of the acreage and the fulfilment of applicable work commitments.
It said the obligations contained in the licence instruments, including the General Licence Conditions, Concession Contract, Minimum Work Programme and Work Performance Security, must be treated as a whole, with continued entitlement to the acreage dependent on performance within the licence term.
According to the commission, the Petroleum Industry Act operates on the principle that an acreage is held to be worked and that acreage not worked within its term returns to the Federal Government.
The NUPRC cited Sections 77, 78 and 88 of the Petroleum Industry Act, alongside the default and revocation provisions in Sections 96 and 97, as the legal basis for enforcing the policy.
The commission also warned that engagement with it would not suspend the term of a licence or excuse a licensee from fulfilling its obligations.
It said it would not assume jurisdiction beyond its statutory mandate or displace agreed dispute-resolution mechanisms or the jurisdiction of the courts, but could intervene or facilitate discussions where such action falls within its mandate.
On disputes between partners, the regulator said disagreements over participating interests, operatorship, deadlocks, cash calls, defaults, assignments and changes of control could delay acreage development.
It urged licence holders to ensure that partnership and financing agreements contain clear provisions for resolving such disputes while allowing operations to continue.
“Internal disagreement will not excuse failure to meet licence obligations,” the commission said.
The NUPRC said licence holders should provide the requested information within the stipulated timeframe as it seeks to accelerate upstream activity and increase Nigeria’s oil and gas production.
The circular was addressed to all holders of Petroleum Prospecting Licences awarded under the three specified licensing rounds.
