Drill Now Or Lose Your Licence, NUPRC Warns Marginal Field, Mini-bid Round Licencees

…Sets October 31 deadline

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has escalated enforcement of the Petroleum Industry Act (PIA) 2021, warning holders of Petroleum Prospecting Licences (PPLs) from the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round to immediately commence work on their acreage or risk losing their licences.

In a circular dated 14 September 2026 and signed by the commission’s chief executive, Oritsemeyiwa Eyesan, the regulator said unworked acreage held beyond its licensed term will revert to the federal government, as provided under Sections 77, 78, 88, 96 and 97 of the PIA.

The circular, referenced NUPRC/1127/Vol.13/55, reminded licencees that a PPL is granted for a defined initial exploration period, extendable only where work commitments tied to that period have been met. It stressed that obligations under the General Licence Conditions, Concession Contract, Minimum Work Programme and Work Performance Security “are to be read as one,” and that continued holding of a licence is contingent on performance.

NUPRC said it intends to enforce this “drill-or-drop” principle against all non-performing acreage, listing sanctions that include refusal of licence extensions, mandatory relinquishment of acreage, calling in of work performance securities and commencement of revocation proceedings.

However, the Commission clarified that the circular is a general advisory and “does not constitute any notice of default” under the PIA or its subsidiary instruments.

Despite the tough stance,, NUPRC emphasised that its objective “is to increase production, not forfeiture.” It acknowledged that licensees may be constrained by financing difficulties, rig availability, security challenges, host community issues, infrastructure gaps, delayed regulatory approvals and partner disputes.

To this end, the regulator has given licencees experiencing such constraints until 31 October 2026 to formally notify the Commission, providing:

their current level of compliance with licence obligations, including execution of the approved work programme;

the specific constraints affecting execution; and proposed mitigation measures and a revised implementation timeline.

The Commission drew clear boundaries around this engagement, saying it would not assume jurisdiction beyond its statutory mandate, displace any agreed dispute-resolution mechanism or the jurisdiction of the courts, or allow engagement with the Commission to suspend the term of a licence or excuse non-performance of obligations. It said it would nonetheless intervene or facilitate discussions where doing so falls within its mandate.

NUPRC also flagged internal partner disputes as a recurring cause of delayed acreage development, urging licensees to ensure that their partnership and financing agreements clearly address participating interests, operatorship, deadlock resolution, cash calls, default, assignment, change of control, and binding dispute-resolution mechanisms that allow operations to continue uninterrupted.

The Commission was explicit that internal disagreement among partners “will not excuse failure to meet licence obligations.”