The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has given holders of non-performing oil licences until October 31, 2026, to demonstrate compliance with their statutory work commitments or risk enforcement actions, including possible revocation.
The directive affects holders of Petroleum Prospecting Licences (PPLs) awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
The Commission said the move was in line with the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021 and the Federal Government’s drive to increase crude oil and gas production.
The directive was contained in a circular signed by the Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, and addressed to the affected licence holders.
The circular, referenced NUPRC/1127/VOL.13/55, reminded licensees that their licences have finite terms and that they are required to execute approved work programmes within the timelines prescribed by law.
The Commission said the PIA was built around the principle that an acreage was awarded to be worked and that any acreage not worked within its term would return to the Federal Government.
It cited Sections 77, 78 and 88 of the PIA, as well as the default and revocation provisions under Sections 96 and 97, as the legal basis for enforcement.
According to the Commission, it would enforce the provisions against all non-performing acreages through measures including refusing extensions, requiring relinquishment, calling in work performance security and commencing revocation proceedings.
“It is performance of those obligations within the term that entitles a licensee to continue to hold the licence,” the circular stated.
The NUPRC, however, stressed that the objective of the enforcement was to increase production rather than simply take licences away from operators.
“The Commission’s objective is to increase production, not forfeiture,” it stated.
The regulator acknowledged that several factors could hinder operators from meeting their approved work programmes, including financing constraints, rig availability, insecurity, host-community issues, infrastructure, regulatory approvals and disputes among partners.
The NUPRC said it was willing, within the limits of its statutory mandate, to assist affected licensees in addressing such challenges.
The Commission therefore directed affected operators to submit details of their compliance status, constraints, proposed mitigation measures and revised implementation timelines not later than October 31, 2026.
Specifically, licensees are required to state their level of compliance with licence obligations, including the execution of approved work programmes; identify specific constraints affecting implementation; and provide proposed mitigation measures and revised timelines.
The Commission warned, however, that its engagement with licensees would not extend beyond its statutory mandate or suspend the duration of a licence or excuse failure to perform contractual and statutory obligations.
It also cautioned that disputes between partners would not shield licensees from enforcement, stressing that internal disagreements would not constitute an excuse for failure to meet work commitments.
The NUPRC urged all affected licence holders to submit the required information within the stipulated deadline to enable the Commission to assess their compliance status and determine appropriate regulatory action.