NUPRC THREATENS TO REVOKE NON-PERFORMING OIL LICENCES, SETS OCTOBER 31 DEADLINE
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The Nigerian Upstream Petroleum Regulatory Commission has threatened to revoke petroleum prospecting licences held by operators who fail to meet their statutory work commitments.
The commission gave affected operators until October 31, 2026, to disclose challenges delaying the development of their oil and gas acreages.
The warning covers holders of licences awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
In a circular dated September 14, 2026, and signed by the Commission Chief Executive, Oritsemeyiwa Eyesan, NUPRC said it was moving to enforce the “drill-or-drop” provisions of the Petroleum Industry Act 2021 to boost oil and gas production.
The regulator warned that it would take action against non-performing acreages, including refusing extensions, requiring relinquishment, calling in work performance security and commencing revocation proceedings.
“Acreage is held to be worked, and acreage that is not worked within its term returns to the Federal Government,” the commission said.
NUPRC said the affected licences carry specific obligations, including approved work programmes, minimum work programmes and work performance security.
It added that continued ownership of the acreages was conditional on operators fulfilling those obligations within the prescribed licence terms.
However, the regulator stressed that the enforcement exercise was designed to unlock production rather than simply dispossess operators of their assets.
“The Commission’s objective is to increase production, not forfeiture,” it said.
NUPRC acknowledged that operators could face legitimate challenges in meeting their obligations, including financing constraints, rig availability, insecurity, host-community issues, infrastructure limitations, regulatory approvals and difficulties involving partners.
Consequently, the commission directed licensees facing such challenges to notify it on or before October 31, 2026.
According to NUPRC, the submissions must state the level of compliance with licence obligations, including execution of approved work programmes, specific constraints affecting implementation, proposed mitigation measures and revised timelines.
The commission said it was prepared, within the limits of its statutory mandate, to help resolve issues affecting the timely execution of licence obligations.
It cautioned, however, that engaging with the regulator would neither suspend the term of a licence nor relieve operators of their statutory responsibilities.
“Internal disagreement will not excuse failure to meet licence obligations,” NUPRC warned, particularly where disputes exist among partners.
The commission urged licensees to ensure that partnership and financing agreements clearly provide for participating interests, operatorship, deadlock, cash calls, default, assignment, change of control and dispute-resolution mechanisms that would allow operations to continue.
NUPRC said it could facilitate discussions where such intervention falls within its mandate but would not assume powers beyond its statutory authority or override agreed dispute-resolution mechanisms and the jurisdiction of the courts.
It also clarified that the circular was a “general advisory” and did not constitute a formal notice of default under the PIA or its subsidiary instruments.
Under the Petroleum Industry Act, NUPRC said a PPL is granted for a defined initial exploration period, with extensions dependent on the terrain of the acreage and fulfilment of applicable work commitments.
The commission said enforcement of the drill-or-drop provisions was aimed at ensuring that licensed oil and gas acreages were actively explored and developed rather than held without corresponding investment and operational activity.
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