…gives licence holders an October 31 deadline
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has moved to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021, warning holders of petroleum prospecting licences that non-performing oil acreages could face relinquishment, loss of performance security and revocation.
The Commission, in a circular dated September 14, 2026, and signed by the Commission Chief Executive, NUPRC, Oritsemeyiwa Eyesan, directed 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 to demonstrate compliance with their statutory work commitments.
The circular, titled “Notice of Enforcement of the Drill-or-Drop Provisions of the Petroleum Industry Act 2021,” said the move was part of the national drive to increase crude oil production by ensuring that licensed acreages are actively worked.
It warned that the PIA operates on the principle that acreage is granted to be worked, while acreage not worked within its licence term should return to the Federal Government.
The NUPRC said it would enforce the provisions against non-performing acreages, including by refusing extensions, requiring relinquishment, calling in work performance security and commencing revocation proceedings.
However, the regulator said its immediate objective was increased production rather than forfeiture, acknowledging that licence holders could face constraints ranging from financing and rig availability to insecurity, host community issues, infrastructure, regulatory approvals and disputes among partners.
The circular partly reads: “The Commission’s objective is to increase production, not forfeiture,” adding that it was willing, within the limits of the law, to assist licensees in resolving legitimate impediments to fulfilling their obligations.
Accordingly, affected licence holders experiencing operational constraints have been given until October 31, 2026, to notify the Commission of their level of compliance, the specific challenges affecting their work programmes, proposed mitigation measures and revised implementation timelines.
The Commission stressed, however, that such engagement would not suspend the term of a licence or excuse a licensee from performing its obligations.
It also warned that internal disagreements among partners would not constitute an excuse for failure to meet licence commitments, urging operators to ensure that partnership and financing agreements clearly address issues including participating interests, operatorship, deadlock, cash calls, default, assignment and change of control.
The circular said the licences were granted for defined initial exploration periods, with extensions conditional on the discharge of applicable work commitments. It noted that the licence instruments, including the General Licence Conditions, Concession Contract, Minimum Work Programme and Work Performance Security, collectively establish the obligations that must be fulfilled for a licensee to continue holding its acreage.
The Commission also clarified that the circular was a general advisory and did not constitute a notice of default under the PIA or its subsidiary instruments.
