KEY POINTS
- NUPRC has reaffirmed October 31 as the deadline for undeveloped oil and gas block holders to begin development or risk losing their licences.
- More than 50 fallow fields have already been revoked and made available for reallocation to new investors.
- New licensees are expected to help increase Nigeria’s crude oil output by 250,000 barrels per day within five years.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has warned companies holding undeveloped oil and gas blocks to begin development activities by October 31, 2026, or risk losing their licences.
The commission said it would enforce the drill-or-drop policy to prevent valuable petroleum assets from remaining idle after being awarded to investors.
Under the policy, companies that fail to meet their development obligations must relinquish the affected acreage to the Federal Government. The government can then reallocate the blocks to investors with the technical expertise and financial capacity to explore and develop them.
The commission’s chief executive, Oritsemeyiwa Eyesan, reaffirmed the deadline, warning that the regulator would fully enforce the requirement against non-compliant licence holders.
The NUPRC said the policy was introduced under Section 94 of the Petroleum Industry Act (PIA) 2021 to address the longstanding problem of undeveloped oil and gas assets.
Before the legislation, the commission explained, oil block allocations were largely discretionary. This allowed some companies to secure licences despite lacking the technical or commercial capacity to develop the resources.
Consequently, some petroleum fields remained idle, limiting the country’s ability to increase production, create jobs and generate revenue.
The commission said more than 50 fallow fields had already been revoked and subsequently made available for reallocation to other investors.
It added that the process was conducted transparently and received commendation from industry operators and the Nigeria Extractive Industries Transparency Initiative (NEITI), which promotes transparency and accountability in Nigeria’s extractive industries.
New investors receive guidance on development
As part of efforts to prevent a repeat of past failures, the NUPRC has introduced an onboarding programme for companies that recently secured oil and gas blocks.
About 22 companies are participating in the programme, which is designed to familiarise new licence holders with their regulatory obligations and provide guidance on developing their petroleum assets within the prescribed timelines.
Among the participants are TotalEnergies, which secured Petroleum Prospecting Licences (PPLs) 2000 and 2001; Sahara Energy, awarded PPLs 270 and 271; First E&P, which secured PPLs 2003 and 2006; and MRS, awarded PPL 303.
The programme will feature regulatory specialists and experienced industry professionals discussing strategies for accelerating exploration and development.
The regulator said the initiative would help new operators avoid the mistakes of previous licence holders whose failure to develop their assets contributed to the accumulation of fallow fields.
The commission expects the newly awarded assets to contribute significantly to Nigeria’s oil production over the coming years.
According to the NUPRC, the new licensees are expected to progress from exploration within 18 months and collectively add 250,000 barrels per day to the country’s crude oil output within five years.
Achieving that target would support Nigeria’s efforts to increase production, strengthen government revenue and create employment opportunities across the petroleum value chain.
However, the expected gains will depend on the companies’ ability to meet their development commitments and move their projects forward within the required timeframes.
The NUPRC said its approach was intended to balance support for business growth with strict compliance with the country’s petroleum laws.
