KEY POINTS
- NUPRC says oil companies can no longer hold licences without developing them following enforcement of the drill-or-drop provision in the Petroleum Industry Act.
- The Commission has offered 50 oil blocks in the 2025 licensing round, with strong investor interest already recorded.
- Sierra Leone’s petroleum authorities visited Nigeria to learn from its regulatory reforms and strengthen bilateral energy cooperation.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has announced that the long-standing practice of oil companies holding petroleum licences without developing the associated assets has effectively come to an end.
The NUPRC made this declaration following the enforcement of the “drill or drop” provision contained in Section 94 of the Petroleum Industry Act (PIA), a key reform designed to ensure that companies either begin exploration activities within a defined period or surrender the licences for reassignment.
The Commission Chief Executive of the NUPRC, Oritsemeyiwa Eyesan, disclosed this during a meeting with the management team of the Petroleum Directorate of Sierra Leone, who paid a working visit to the Commission’s headquarters in Abuja.
According to Eyesan, the implementation of the drill-or-drop policy has brought greater discipline and clarity to NUPRC. She explained that in the past, several operators held exploration licences for extended periods, sometimes up to two decades, without undertaking meaningful development activities on the oil blocks.
PIA Fundamentally Changed the NUPRC Situation
She noted that the PIA has fundamentally changed that situation by introducing a regulatory framework that compels operators to take action within specified timelines.
“The Petroleum Industry Act opened the sector to both large and small players because it introduced a clear drill-or-drop provision,” Eyesan said. “Previously, some companies retained licences for as long as 20 years without any exploration work. That era is now over.”
Eyesan further stated that the enforcement of the policy has increased confidence among investors and has stimulated renewed interest in Nigeria’s oil and gas industry.
As part of efforts to expand exploration activities and attract new investors, the NUPRC has placed 50 oil blocks on offer in the ongoing 2025 licensing round.
She said the pre-qualification stage of the bid process has already demonstrated strong participation from both local and international investors, signalling growing appetite for new opportunities in Nigeria’s upstream sector.
To ensure fairness and prevent monopolisation, the Commission introduced strict guidelines that limit each participating company to bidding for a maximum of two blocks, whether independently or as part of a consortium.
