KEY POINTS
- NUPRC gave affected operators until October 31 to explain delays.
- Non-compliant companies risk losing their oil and gas licences.
- The regulator says its priority is boosting production, not forfeiture.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has warned oil and gas companies holding undeveloped assets that they risk losing their licences if they fail to meet their work commitments.
The regulator has given affected operators until October 31, 2026, to explain delays, demonstrate compliance with approved work programmes and outline plans to resolve challenges preventing them from developing their oil and gas assets.
The commission said it would enforce the drill-or-drop provisions of the Petroleum Industry Act (PIA), which require companies to develop the assets allocated to them or risk losing their rights to the acreage.
Speaking at an energy conference organised by the Harvard Business School Association of Nigeria in Lagos on Friday, NUPRC Chief Executive Oritsemeyiwa Eyesan said the commission would take action against operators that ignored its directives.
She explained that companies were expected to understand the nature of the assets they acquired and present clear plans for developing their resources.
Eyesan added that the commission had issued a circular directing non-compliant operators to respond before the October 31 deadline.
NUPRC enforces drill-or-drop policy
The commission’s latest warning is part of efforts to ensure that oil and gas licences translate into actual exploration, development and production rather than allowing companies to hold valuable assets without carrying out the required work.
Under the Petroleum Industry Act, operators are expected to fulfil specific work obligations attached to their licences. Failure to meet these requirements could result in regulatory action, including the withdrawal of their rights to the assets.
Eyesan said companies holding onshore assets were expected to begin fulfilling their obligations within the stipulated three-year period.
She warned that the commission would call up assets where operators failed to undertake the required activities within the permitted timeframe.
The policy is intended to discourage companies from retaining oil and gas acreages without making meaningful progress towards developing them.
Deadline covers licences awarded in three bid rounds
In a circular dated September 14, 2026, and signed by Eyesan, the NUPRC directed companies awarded licences under the 2020 marginal bid round, the 2022/2023 mini bid round and the 2024 licensing round to disclose their compliance status by October 31.
The affected operators must report the extent to which they have executed their approved work programmes and identify the specific factors responsible for delays.
They are also required to propose practical solutions to the challenges and provide revised implementation timelines where necessary.
The commission said the information would help it assess operators’ performance and determine the appropriate regulatory response.
The directive is supported by Sections 77, 78 and 88 of the Petroleum Industry Act, alongside Sections 96 and 97, which contain provisions relating to defaults and licence revocation.
The NUPRC outlined several measures it could take against operators that fail to meet their obligations.
These include refusing applications for licence extensions, requiring companies to relinquish some or all of their acreages, calling in work performance securities and initiating proceedings to revoke their licences.
The commission explained that a petroleum prospecting licence comes with specific conditions covering exploration periods, minimum work programmes, contractual obligations and financial guarantees.
