NUPRC Issues Oct 31 Ultimatum to Non-Performing Oil Licence Holders
CHIGOZIE AMADI
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a fresh directive to holders of non-performing petroleum licences, reminding them that their licences are time-bound and that approved work programmes must be executed within the timelines stipulated by the Petroleum Industry Act (PIA) 2021 as part of efforts to boost the nation’s crude oil production.
The directive was conveyed in a circular with reference number NUPRC/1127/VOL.13/55, signed by the Commission Chief Executive, Mrs. Oritsemeyiwa Eyesan, and addressed to holders of Petroleum Prospecting Licences (PPLs) awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and the 2024 Licensing Round.
According to the Commission, the circular was issued to reinforce the Federal Government’s drive to increase oil production while reminding operators that licences cannot be held indefinitely without fulfilling statutory obligations.
NUPRC stressed that the Petroleum Industry Act is founded on the principle that oil acreages are meant to be actively developed, noting that any licence that remains unworked within its approved tenure automatically reverts to the Federal Government.
The Commission explained that this position is supported by Sections 77, 78 and 88 of the PIA, as well as the default and revocation provisions contained in Sections 96 and 97.
It consequently announced plans to fully enforce the “Drill-or-Drop” provisions of the Act across all non-performing acreages. The enforcement measures include refusal to grant licence extensions, compulsory relinquishment of affected acreages, invocation of work performance securities and the commencement of revocation proceedings where necessary.
According to the regulator, the right to retain a petroleum licence depends entirely on the operator’s ability to fulfil the obligations attached to it within the approved licence period.
“It is performance of those obligations within the term that entitles a licensee to continue to hold the licence,” the circular stated.
The Commission, however, clarified that its intention is not simply to withdraw licences but to stimulate higher production from the country’s upstream petroleum sector.
“The Commission’s objective is to increase production, not forfeiture,” it stated.
NUPRC acknowledged that operators may encounter genuine challenges, including limited financing, inadequate rig availability, security concerns, host community issues, infrastructure constraints, regulatory approvals and partner arrangements. It assured licensees that it remains prepared, within the limits of the law, to assist in addressing such challenges.
The Commission directed all affected licence holders to notify it of their compliance status on or before October 31, 2026.
Operators facing implementation challenges are required to provide details of their level of compliance with licence obligations, including execution of approved work programmes, identify the specific constraints affecting performance, and submit proposed mitigation measures together with revised implementation timelines.
NUPRC also made it clear that it would not exceed its statutory powers by suspending licence terms or excusing non-performance through engagements outside the provisions of the law.
It further warned that disagreements among business partners would not shield any licence holder from enforcement actions, stressing that internal disputes cannot serve as justification for failing to meet licence obligations.
The Commission urged all affected operators to submit the required information before the October 31 deadline to avoid sanctions under the Petroleum Industry Act.
