The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is set enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021.
To this end, the Commission is urging holders of non-performing licenses from the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round to meet their statutory work commitments or risk losing their licences.
The notice is contained in a circular signed by the Commission 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 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.
The NUPRC through the circular emphasises that the PIA is built around 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 PIA, as well as the default and revocation provisions of Sections 96 and 97.
The Commission has therefore given notice that it intends to enforce the provisions “in respect of all non-performing acreage”, with measures including “refusing extension, requiring relinquishment, calling in the work performance security and commencing revocation proceedings.”
According to the NUPRC, the continued possession of a licence depends on meeting the obligations attached to it.
“It is performance of those obligations within the term that entitles a licensee to continue to hold the licence,” the circular reads in part.
However, the Commission states that the overall objective is to increase production rather than simply take away licences.
“The Commission’s objective is to increase production, not forfeiture,” the circular states.
The NUPRC also acknowledges that financing, rig availability, security, host-community engagement, infrastructure, regulatory approvals and partner arrangements may impede performance and is therefore willing within the limits of the law, to assist licensees in resolving such challenges.
Affected licensees have until October 31, 2026 to notify the Commission of their compliance status, constraints, proposed mitigation measures and revised implementation timelines.
Licensees experiencing such constraints are encouraged to notify the Commission not later than 31 October 2026, stating:
a. the level of compliance with its licence obligations including the execution of its approved work programme;
b. the specific constraints affecting execution; and
c. the proposed mitigation measures and revised implementation timeline,” according to the circular.
The Commission notes that it will Not assume jurisdiction beyond its statutory mandate” or permit engagement to suspend a licence term or excuse performance.
The NUPRC further warns that partner disputes will not provide a shield against enforcement, while internal disagreement will not excuse failure to meet licence obligations.”
All affected licensees are therefore urged submit the required information within the stipulated deadline.
