SAT SEPT 19 2026-theGBJournal| Nigeria’s upstream petroleum regulator has warned holders of petroleum prospecting licences that it will begin enforcing the “drill-or-drop” provisions of the Petroleum Industry Act 2021 against operators that fail to meet their work commitments.
The notice is contained in a circular signed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Chief Executive, Mrs. Oritsemeyiwa Eyesan, and addressed to holders of PPLs awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
The Commission said, the circular with reference number NUPRC/1127/VOL.13/55 was issued in furtherance of the national drive to increase production” and to remind licensees of the finite term of their licences and their obligations to execute approved work programmes within the timelines prescribed by law.
It reminded licence holders of their statutory obligations, including the timely execution of approved work programmes.
Under Section 77 of the Petroleum Industry Act (PIA), a petroleum prospecting licence is granted for a defined initial exploration period, with a possible extension subject to the fulfilment of the applicable work commitments.
The NUPRC said the licence was accompanied by obligations contained in the instruments governing the licence, including the General Licence Conditions, Concession Contract, Minimum Work Programme and Work Performance Security.
“The Commission reiterates that the PIA proceeds on a simple principle: acreage is held to be worked, and acreage that is not worked within its term returns to the Federal Government,” the circular said.
It added that the principle was given effect through Sections 77, 78 and 88 of the PIA, as well as the default and revocation provisions under Sections 96 and 97.
Enforcement measures
The regulator said it intended to enforce those provisions against all non-performing acreages.
Possible measures include refusing extensions, requiring operators to relinquish acreage, calling in work performance security and beginning revocation proceedings.
The commission stressed, however, that the circular was a general advisory and did not constitute a formal notice of default under the PIA or its subsidiary instruments.
“The Commission’s objective is to increase production, not forfeiture,” it said.
The NUPRC acknowledged that licence holders could face challenges affecting their ability to fulfil their obligations, including financing difficulties, rig availability, security concerns, host-community engagement, infrastructure, regulatory approvals and partner arrangements.
It said it was willing, within the limits of the law, to assist operators in resolving such obstacles.
Licence holders experiencing constraints have been asked to notify the commission by 31 October 2026.
Their submissions should include their level of compliance with licence obligations and approved work programmes, the specific constraints affecting execution, and proposed mitigation measures and revised implementation timelines.
Partner disputes
The NUPRC also warned that it would not use its regulatory powers to suspend licence terms or excuse operators from their contractual obligations.
It said it would not assume jurisdiction beyond its statutory mandate, displace agreed dispute-resolution mechanisms or interfere with the jurisdiction of the courts.
However, the commission said it could intervene or facilitate discussions where such action fell within its mandate and could help resolve issues affecting the timely performance of obligations.
It also highlighted the potential impact of disputes between partners on oilfield development.
“The Commission recognizes that partner disputes can delay acreage development,” the circular said.
It urged licence holders to ensure that partnership and financing agreements clearly address issues including participating interests, operatorship, deadlock, cash calls, default, assignment and change of control.
The latest warning signals a more active enforcement approach by the NUPRC towards licences where operators have failed to meet their agreed exploration and development commitments.
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