By Stella Odueme
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has commenced moves to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021, warning holders of non-performing oil licences to meet their work obligations or risk revocation.
The affected licences were awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
The Commission disclosed this in a circular signed by its Chief Executive, Mrs. Oritsemeyiwa Eyesan, and addressed to holders of Petroleum Prospecting Licences (PPLs) issued under the respective licensing rounds.
The circular, referenced NUPRC/1127/VOL.13/55, is part of the Federal Government’s drive to increase oil and gas production and ensure that licensed acreages are developed within the periods prescribed by law.
The regulator reminded licensees that petroleum assets are granted for the purpose of exploration, development and production, stressing that unworked acreages could return to the Federal Government.
It said the enforcement was backed by Sections 77, 78 and 88 of the PIA, as well as the default and revocation provisions contained in Sections 96 and 97.
The Commission warned that non-performing licensees could face refusal of licence extensions, compulsory relinquishment, calling in of work performance securities and commencement of revocation proceedings.
According to the circular, meeting licence obligations within the approved term is a condition for continued ownership of the asset.
“It is performance of those obligations within the term that entitles a licensee to continue to hold the licence,” the NUPRC stated.
The Commission, however, said its intention was not to strip investors of their assets but to ensure that petroleum acreages contribute to national production.
“The Commission’s objective is to increase production, not forfeiture,” it said.
The regulator acknowledged that operational challenges, including funding difficulties, rig availability, insecurity, host-community issues, infrastructure gaps, regulatory approvals and disputes among partners, could affect the execution of approved work programmes.
It said affected licensees could seek assistance in addressing such challenges, subject to the limits of the law.
The NUPRC directed all affected licence holders to notify it of their compliance status and operational constraints by October 31, 2026.
The submissions are expected to contain details of the extent of compliance with licence obligations, execution of approved work programmes, specific challenges affecting operations, proposed mitigation measures and revised implementation timelines.
The Commission cautioned that it would not allow engagements outside its statutory mandate to suspend licence terms or excuse non-performance.
It also warned that partner disputes would not provide protection against enforcement, insisting that internal disagreements could not relieve licensees of their obligations.
The NUPRC urged all affected licence holders to submit the required information within the stipulated deadline to facilitate the assessment of their compliance and proposed remedial measures.