Holders of non-performing oil licences risk losing their acreages if they fail to meet their approved commitments, as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) moves to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act 2021.
The regulator issued a deadline of 31 October 2026 for affected operators to declare their compliance status, detail operational challenges, and submit revised schedules to fulfil their obligations.
The warning was issued in a circular signed by NUPRC Chief Executive Oritsemeyiwa Eyesan, dated 14 September 2026, with reference NUPRC/1127/Vol.13/55. The enforcement drive specifically targets underperforming licence holders across recent licensing exercises, including at least 62 successful awardees from the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round, and the 2024 Licensing Round.
Under the 2020 Marginal Field Bid Round, 50 Petroleum Prospecting Licences (PPLs) were issued, with the capacity to produce approximately 58,000 barrels of oil per day and 87 million standard cubic feet of gas per day. The 2022 Mini Bid Round initially targeted seven deep offshore PPLs, culminating in the 2022/2023 awards. In July 2026, the regulator confirmed that 12 awardees had received 19 PPLs across deep offshore, shallow-water, and continental-shelf acreages from the 2022/2023 and 2024 licensing rounds.
The NUPRC stressed that its primary goal is to boost national oil and gas output by ensuring licensed areas are actively explored, rather than revoking licences outright. It noted that the PIA is founded on the principle that “acreage is held to be worked, and acreage that is not worked within its term returns to the Federal Government.”
Supported by Sections 77, 78, 88, 96, and 97 of the Act, potential enforcement measures include denying licence extensions, demanding acreage relinquishment, calling in work performance securities, and launching revocation proceedings.
The circular noted: “A petroleum prospecting licence is granted under section 77 of the Act for a defined initial exploration period, with an optional extension determined by the terrain of the acreage and conditional upon discharge of the work commitment applicable to the initial period.” The regulator added that licence retention depends entirely on fulfilling combined obligations set out in the licence instruments, General Licence Conditions, Concession Contract, Minimum Work Programme, and Work Performance Security.
The commission instructed struggling licensees to submit formal notifications by 31 October 2026. Submissions must outline “the level of compliance with its licence obligations including the execution of its approved work programme; the specific constraints affecting execution; and the proposed mitigation measures and revised implementation timeline.”
However, the regulator cautioned that assisting operators would not extend statutory terms or excuse contractual duties, warning that “the Commission will not assume jurisdiction beyond its statutory mandate, displace any agreed dispute-resolution mechanism or the jurisdiction of the courts, or permit engagement with the Commission to suspend the term of a licence or excuse the performance of any obligation.” It further stated that “internal disagreement will not excuse failure to meet licence obligations.”
All affected operators must submit their filings by the 31 October deadline, with enquiries directed to the Executive Commissioner for Exploration and Acreage Management, Bashari Indabawa.