The Nigerian Upstream Petroleum Regulatory Commission has given operators holding non-performing petroleum prospecting licenses until October 31, 2026, to explain the challenges affecting their operations or risk regulatory sanctions, including possible revocation.
The directive affects licenses 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 and signed by the NUPRC Chief Executive, Oritsemeyiwa Eyesan, the commission said it was enforcing the “drill-or-drop” provisions of the Petroleum Industry Act 2021 to ensure that awarded oil and gas acreages are actively explored and developed.
The regulator warned that operators failing to meet their approved work commitments could face measures including refusal of license extensions, compulsory relinquishment of acreage, the calling in of work performance securities and the commencement of revocation proceedings.
NUPRC stressed that holding an oil license comes with specific obligations, including approved work programmes, minimum work commitments and performance guarantees. Continued ownership of an acreage is therefore tied to fulfilling those obligations within the prescribed license period.
However, the commission clarified that the immediate goal was not simply to cancel licenses.
It said its primary objective was to increase Nigeria’s oil and gas production by encouraging operators to develop dormant or underperforming assets.
NUPRC acknowledged that some operators may be experiencing difficulties related to financing, rig availability, insecurity, host-community relations, infrastructure, regulatory approvals and disagreements among partners.
Affected operators have therefore been directed to submit details of their compliance status, the specific obstacles delaying their approved work programmes, proposed solutions and revised implementation timelines by October 31.
The commission said it would consider ways to facilitate solutions within its legal mandate, but warned that such engagement would not extend license terms or exempt operators from their contractual and statutory obligations.
NUPRC also made clear that disputes between partners would not excuse failure to fulfil license obligations, urging operators to ensure their agreements adequately address issues such as financing, operatorship, default, deadlock and dispute resolution.
The latest directive forms part of the regulator’s broader effort to ensure that oil and gas assets awarded through recent licensing exercises translate into actual exploration, investment and production rather than remaining inactive.
NUPRC said the October 31 deadline gives affected operators an opportunity to disclose genuine constraints and present credible plans for meeting their commitments before further enforcement action is considered.
