…With a renewed emphasis on accountability, technical capacity and timely field development, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is preparing a new generation of oil block awardees to translate their licences into production, jobs and government revenue.
THUR OCT 22 2026-theGBJournal| Winning an oil block in Nigeria is a significant milestone for any company seeking to participate in the country’s petroleum industry.
But securing a licence, paying the required signature bonus and receiving a Petroleum Prospecting Licence (PPL) are only the beginning of a much longer journey.
The real test comes after the award: Can the company mobilise the technical expertise, financial resources and operational capacity required to explore the acreage, establish its commercial potential and ultimately bring discovered oil and gas to production?
For Nigeria, the answer to that question has consequences far beyond the fortunes of individual companies. When awarded petroleum assets remain undeveloped, the country loses opportunities to increase crude oil production, create employment, attract investment and generate revenue for the Federation.
It is against this background that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) organised a two-day onboarding programme for the latest beneficiaries of Petroleum Prospecting Licences.
The initiative is designed to help new licensees understand the regulatory, technical, commercial and operational requirements for developing their assets, with the ultimate objective of moving from exploration to first oil.
The programme reflects a broader shift in Nigeria’s approach to petroleum licensing: awarding an oil block is no longer the end of the regulatory process. Ensuring that the asset is developed within the applicable timeframe is equally important.
Addressing the Legacy of Undeveloped Oil Blocks
For years, the allocation of oil blocks in Nigeria was widely characterised by a discretionary system in which companies could obtain petroleum assets without necessarily possessing the technical and commercial capacity to develop them effectively.
The consequences were significant. Some companies that secured oil blocks struggled to progress beyond the initial stages of ownership, leaving potentially valuable acreage undeveloped for extended periods.
Such inactivity carried an opportunity cost for the country. Beyond the oil and gas that remained undiscovered or unproduced, the failure to develop these assets meant fewer opportunities for local employment, reduced investment in supporting industries and revenue that the government could otherwise have earned from productive petroleum operations.
When the NUPRC was established in 2021, following the enactment of the Petroleum Industry Act (PIA), it inherited an upstream sector facing the challenge of how to ensure that petroleum resources allocated to investors translated into tangible economic activity.
The central question was how to move the industry away from a situation in which companies could hold licences without making sufficient progress towards developing their assets.
The regulatory response has increasingly focused on accountability, enforcement of licence obligations and the need to match access to petroleum resources with the capacity and willingness to develop them.
The ‘Drill or Drop’ Principle: Making Licences Work for Nigeria
A key component of this approach is the drill-or-drop policy, which is linked to the provisions of Section 94 of the Petroleum Industry Act.
The principle is straightforward: companies awarded petroleum licences are expected to undertake the required exploration and development activities within the applicable timeframe.
Where the relevant legal and contractual obligations are not met, the undeveloped acreage may be subject to relinquishment or other regulatory action in accordance with the law and the terms of the licence.
In practical terms, the policy seeks to discourage the prolonged retention of petroleum assets without meaningful development activity.
It also sends a clear signal to prospective investors that securing an oil block comes with responsibilities. Companies must demonstrate that they can progress their assets rather than simply retain them as part of a portfolio of petroleum interests.
The objective is to make acreage available to investors who are prepared and equipped to undertake the work necessary to unlock its potential.
This approach does not mean that every delay in petroleum development automatically translates into a breach. Exploration is inherently complex, capital-intensive and subject to geological, technical, commercial and operational risks.
The regulatory requirement is therefore to ensure that licensees meet the applicable obligations and timelines governing their particular assets.
Nevertheless, the underlying message is clear: petroleum resources must be developed in accordance with the law, and licences cannot be treated as substitutes for actual investment and operational progress.
Revocation and Reallocation: Giving Dormant Assets Another Chance
The implementation of the policy has included action against fallow petroleum fields and undeveloped assets held by previous licence holders.
According to information provided by the Commission, more than 50 such fields have been revoked and subsequently made available for reallocation to new investors.
The process is intended to create another opportunity for these assets to be developed by companies willing and able to undertake the necessary exploration and production activities.
Transparency has been an important consideration in the exercise. The Commission has pointed to the openness of the process, with operators and the Nigerian Extractive Industries Transparency Initiative (NEITI) cited as attesting to its transparency.
NEITI is the government agency responsible for promoting transparency and accountability in Nigeria’s extractive industries, including oil and gas.
The significance of the exercise lies in the opportunity to change the trajectory of previously inactive assets. Instead of allowing potentially productive acreage to remain dormant indefinitely, the government can seek to place it in the hands of investors prepared to advance its development.
However, reallocation alone cannot guarantee success. The new holders must still overcome the technical and commercial challenges associated with exploration, appraisal, project development and eventual production.
That is where the NUPRC’s onboarding programme becomes particularly relevant.
Beyond Enforcement: Preparing New Licensees for the Journey
While enforcement can compel compliance with applicable obligations, it cannot by itself equip an investor with the knowledge and practical expertise required to develop a petroleum asset.
Recognising this distinction, the NUPRC has complemented its regulatory measures with an onboarding programme intended to prepare new licence holders for the demands of upstream petroleum operations.
The two-day programme brings together subject-matter experts from different departments of the Commission, alongside external industry facilitators with decades of experience.
Their role is to guide the new licensees through the processes, requirements and considerations involved in developing their assets, helping them understand what is expected of them and how to navigate the journey from exploration towards first oil.
For companies entering the upstream sector, the process can involve a steep learning curve. Understanding licence conditions, regulatory approvals, exploration programmes, technical evaluations, environmental obligations, project planning and commercial considerations is essential to moving a petroleum asset forward.
Even experienced companies must coordinate multiple disciplines and comply with an extensive regulatory framework before production can begin.
The onboarding initiative is therefore intended to bridge knowledge gaps, clarify regulatory expectations and help licensees identify the steps required to progress their projects efficiently.
It also provides an opportunity for new investors to learn from the experiences of previous operators, including the challenges that contributed to the prolonged underdevelopment of some of the assets now being reassigned.
In this respect, the programme represents a business-enabling dimension of regulation. The Commission is not only setting expectations and enforcing obligations; it is also providing guidance intended to help investors meet those expectations.
The ultimate test, however, will be whether the knowledge gained translates into concrete action on the ground.
Who Are the New Beneficiaries?
The latest group of awardees includes established players in Nigeria’s oil and gas industry as well as new entrants seeking to establish a presence in the upstream segment.
Among the companies identified by the Commission are TotalEnergies, which won PPL 2000 and PPL 2001; Sahara Energy, awarded PPL 270 and PPL 271; First E&P, which secured PPL 2003 and PPL 2006; and MRS, awarded PPL 303.
Approximately 22 companies are participating in the initiative.
The composition of the group is significant because it brings together companies with differing levels of experience, organisational capabilities and operational exposure to the upstream petroleum business.
The challenge for established industry players will be to translate their expertise and resources into timely development of the awarded acreage. For newer entrants, understanding the regulatory environment and developing the capacity to execute their work programmes will be particularly important.
Regardless of their backgrounds, all the awardees face a common responsibility: to demonstrate meaningful progress in developing the assets entrusted to them.
The Commission’s expectation is that the onboarding process will help the companies approach this responsibility with a clearer understanding of the technical, regulatory and commercial steps involved.
The Economic Stakes: More Production, Jobs and Revenue
The NUPRC’s initiative is ultimately about more than helping companies understand regulatory procedures. It is also connected to Nigeria’s broader objective of increasing the productive contribution of its upstream petroleum sector.
The Commission is focused on ensuring that the new licensees progress from exploration within 18 months and collectively contribute an additional 250,000 barrels per day to national crude oil production within five years.
These are significant targets, and achieving them will depend on several factors, including exploration results, the commercial viability of discoveries, access to capital, infrastructure availability, project execution and the ability to meet applicable regulatory requirements.
Not every exploration effort results in a commercially viable discovery, and the journey from identifying petroleum potential to producing oil can be lengthy and technically demanding.
Nevertheless, getting more assets actively explored and developed creates opportunities to expand the country’s producing asset base and strengthen its capacity to generate value from petroleum resources.
Higher production, where commercially viable and sustainably achieved, can support government revenue through the applicable fiscal and royalty frameworks. It can also stimulate demand for services across the oil and gas value chain, including engineering, drilling, logistics, fabrication, construction and maintenance.
These activities can create employment opportunities for Nigerians and open up business opportunities for local contractors and service providers.
The benefits may also extend to host communities and businesses supplying goods and services to petroleum operations.
For these outcomes to materialise, however, the industry must move beyond licence awards and training sessions to actual investment, field activity and commercially sustainable production.
The onboarding programme is one step in that process.
October 31, 2026: A Deadline With Consequences
The Commission has also reiterated the importance of compliance with the deadline for developing previously awarded petroleum assets.
The NUPRC Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, has restated October 31, 2026, as the deadline for companies that were awarded oil and gas blocks but have yet to develop them.
Under the Commission’s stated position, undeveloped blocks that fall within the applicable relinquishment requirements will be returned to the Federation and made available for award to investors prepared to undertake the necessary work, subject to the governing legal and regulatory provisions.
The deadline reinforces the Commission’s position that the award of a petroleum licence carries an obligation to make progress towards development.
It also serves as a reminder to existing licence holders that the regulatory environment is increasingly focused on performance and compliance, rather than simply the possession of petroleum acreage.
For the industry, the implications are substantial. Companies that have not progressed their assets need to assess their obligations and take the necessary steps to meet the requirements applicable to their licences.
For prospective investors, the prospect of further acreage becoming available may present opportunities, provided they possess the technical, financial and commercial capabilities required to develop it.
The broader policy objective remains to ensure that petroleum resources are not left idle when there are investors capable of putting them to productive use.
From Exploration to First Oil: What Success Will Look Like
For the companies attending the onboarding programme, the real work begins after the sessions conclude.
They must translate regulatory guidance and technical knowledge into executable work programmes, secure the necessary resources, meet their licence obligations and progress their assets through the stages of exploration and development.
Depending on the characteristics of each asset, this may require geological and geophysical studies, seismic data acquisition and interpretation, exploration drilling, appraisal, development planning and the construction or deployment of the facilities needed for production.
Each stage carries its own technical uncertainties, financial commitments and regulatory requirements. The sequence and duration will depend on the nature of the acreage and the results of the work undertaken.
The Commission’s challenge will be to maintain an appropriate balance between enforcing the law and enabling investors to navigate the regulatory process efficiently.
For the licensees, success will be measured not by attendance at an onboarding programme or possession of a licence, but by demonstrable progress towards fulfilling their work obligations and, where commercial discoveries are made, bringing viable fields into production.
The expected gains include greater utilisation of petroleum resources, increased investment, opportunities for job creation and additional public revenue.
These outcomes will depend on execution, sustained capital commitment and effective collaboration between regulators, operators, service providers and other stakeholders.
A New Chapter in Nigeria’s Upstream Petroleum Sector
As the NUPRC enters the second day of its onboarding programme, its message to the latest awardees is clear: obtaining a petroleum licence is the beginning of a responsibility, not the completion of a transaction.
The Commission’s approach combines the enforcement of licence obligations with efforts to equip investors with the knowledge needed to develop their assets. Through the drill-or-drop principle, it seeks to address the problem of dormant acreage; through onboarding, it aims to help new licence holders avoid the pitfalls that prevented some previous operators from progressing their assets.
Whether the initiative delivers its intended impact will ultimately depend on the actions of the companies involved and their ability to convert awarded acreage into productive operations.
The stakes extend beyond the regulator and the licensees. Every commercially viable field developed represents an opportunity to attract investment, support employment, expand business activity and generate revenue for the country.
As the October 31, 2026 deadline approaches, the message to existing licence holders is equally important: undeveloped acreage cannot be assumed to remain in their hands indefinitely where the applicable legal and regulatory requirements for relinquishment have been triggered.
The task for the new awardees, is to learn from the past, meet their obligations and move their assets forward.
The ultimate measure of success will not be the number of licences awarded or companies onboarded, but how many assets progress towards commercial production—and how much value that progress creates for Nigerians.
The NUPRC has encouraged stakeholders and members of the public to follow its activities on its social media platforms, where the Commission’s subject-matter experts and external industry veterans are discussing how oil and gas blocks can be developed within the shortest practicable time.
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