The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has drawn a hard line against oil companies sitting on undeveloped acreages, warning that holders of petroleum prospecting licences who fail to meet their work commitments risk losing their licences.
In a circular dated September 14, 2026, and signed by Commission Chief Executive, Oritsemeyiwa Eyesan, the regulator said it would enforce the “drill-or-drop” provisions of the Petroleum Industry Act (PIA) 2021 against non-performing acreages.
The directive affects holders of Petroleum Prospecting Licences awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
The commission said the move was part of the Federal Government’s drive to increase crude oil and gas production by ensuring that licensed acreages are actively explored and developed.
NUPRC warned that operators could not hold oil blocks indefinitely without fulfilling the work obligations attached to their licences.
It stressed that under the PIA, “acreage is held to be worked, and acreage that is not worked within its term returns to the Federal Government.”
The regulator said enforcement could include refusal to extend licences, compulsory relinquishment, calling in work performance securities and commencement of revocation proceedings.
Operators Get October 31 Deadline
However, the NUPRC said its immediate objective was to increase production rather than simply confiscate oil assets, acknowledging that operators could face legitimate obstacles in meeting their commitments.
It listed financing difficulties, rig availability, insecurity, host-community engagement, infrastructure, regulatory approvals and disputes among partners as some of the challenges capable of delaying field development.
The commission consequently gave affected licensees until October 31, 2026, to notify it of impediments affecting their operations.
According to the circular, operators must provide details of their level of compliance with licence obligations and approved work programmes, identify specific constraints affecting execution, and submit proposed mitigation measures alongside revised implementation timelines.
NUPRC said it was prepared, within its statutory powers, to facilitate the resolution of genuine obstacles to timely development.
But the regulator warned that approaching the commission would not suspend the validity period of a licence or excuse an operator from meeting its contractual and statutory obligations.
“Engagement with the Commission” would not, it said, “suspend the term of a licence or excuse the performance of any obligation.”
Partner Disputes No Excuse
The commission also took aim at disputes among oil-field partners, warning that internal disagreements over ownership interests, operatorship, financing and other arrangements would not be accepted as excuses for failing to meet licence obligations.
It urged licensees to ensure that their partnership and financing agreements clearly provide for participating interests, operatorship, deadlock situations, cash calls, defaults, assignments, changes of control and binding dispute-resolution mechanisms.
NUPRC said such arrangements should be structured in a way that allows petroleum operations to continue even when disputes arise among partners.
The regulator’s latest move effectively puts operators on notice that the era of holding oil acreage without meaningful development will face tougher regulatory scrutiny.
The commission said the licence instruments, general licence conditions, concession contracts, minimum work programmes and work performance securities collectively impose obligations that must be fulfilled within the prescribed licence period.
It stressed that continued possession of an acreage is conditional on performance of those obligations.
