Odimmegwa Johnpeter/Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has directed holders of non-performing licences under the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round to fulfil their statutory work commitments or risk losing their licences, as it moves to enforce the “Drill or Drop” provisions of the Petroleum Industry Act (PIA) 2021.
The directive was contained in a circular signed by the Commission’s Chief Executive, Mrs. Oritsemeyiwa Eyesan, and addressed to holders of Petroleum Prospecting Licences awarded under the three bid rounds.
The “drill or drop” policy is a legal provision under Section 94 of the PIA that compels oil and gas license holders to actively develop their assigned exploration assets within a specified timeframe or relinquish them back to the government.
The circular, referenced NUPRC/1127/VOL.13/55, was issued to advance the national drive to boost production and to remind licensees of the finite term of their licences and their obligation to execute approved work programmes within timelines set by law.
In the notice, NUPRC stressed that the PIA rests on a simple principle: acreage is held on the basis that it is worked, and any acreage left unworked within its term reverts to the Federal Government. This principle is anchored in Sections 77, 78 and 88 of the PIA, alongside the default and revocation provisions of Sections 96 and 97.
The Commission said it would enforce these provisions against all non-performing acreage through measures such as refusing extensions, requiring relinquishment, calling in work performance securities, and commencing revocation proceedings.
It noted that continued possession of a licence depends on the licensee meeting the obligations attached to it, stating that performance of those obligations within the stipulated term is what entitles a licensee to retain it.
Despite the firm stance, NUPRC clarified that its goal is to boost production rather than strip companies of their licences.
The Commission acknowledged that factors such as financing, rig availability, security challenges, host-community engagement, infrastructure gaps, regulatory approvals and partner arrangements could hinder performance, and expressed willingness to help licensees address such obstacles within the bounds of the law.
Affected licensees have been given until October 31, 2026, to inform the Commission of their compliance status, the constraints affecting execution of their work programmes, and their proposed mitigation measures and revised timelines.
NUPRC, however, made clear that it would not assume jurisdiction beyond its statutory mandate or allow such engagement to suspend a licence term or excuse non-performance.
It further warned that neither partner disputes nor internal disagreements among licensees would be accepted as grounds for failing to meet licence obligations.
All affected licensees have been urged to submit the required information before the deadline.
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