NUPRC to revoke idle oil licences under ‘Drill-or-Drop’ rule

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said it will enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021 against holders of non-performing licences, with revocation among the possible sanctions.

The warning affects licensees from the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round, who must meet their statutory work commitments or risk losing their acreage.

The notice is contained in a circular referenced NUPRC/1127/VOL.13/55, signed by the commission’s Chief Executive, Mrs. Oritsemeyiwa Eyesan, and addressed to holders of petroleum prospecting licences (PPLs) awarded under the three rounds.

It was made public on Friday by the Commission’s head, media and corporate communications, Eniola Akinkuotu.

According to the NUPRC, the circular was issued to support the national drive to increase production and to remind licensees that their licences run for a finite term, within which approved work programmes must be executed.

The circular says the PIA is built on a straightforward principle: “an acreage is held to be worked, and any acreage that is not worked within its term returns to the Federal Government.”

The principle is backed by Sections 77, 78 and 88 of the Act, as well as the default and revocation provisions in Sections 96 and 97.

It said it will enforce the provisions “in respect of all non-performing acreage,” through measures including “refusing extension, requiring relinquishment, calling in the work performance security and commencing revocation proceedings.”

The NUPRC, however, said its aim is not to strip operators of their licences. “The Commission’s objective is to increase production, not forfeiture,” the circular stated.

It acknowledged that financing, rig availability, security, host-community engagement, infrastructure, regulatory approvals and partner arrangements might hinder performance, and said it was willing, within the limits of the law, to help licensees resolve such challenges.

Affected licensees have until October 31, 2026, to notify the Commission of their level of compliance with licence obligations, including execution of approved work programmes; the specific constraints affecting execution, and their proposed mitigation measures and revised implementation timelines.