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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned holders of non-performing oil licences that they risk losing their acreages if they fail to meet approved work commitments, as it moves to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021.
The regulator gave affected operators until October 31, 2026, to disclose their compliance status, identify obstacles delaying operations and submit revised plans for fulfilling their obligations.
The directive covers licensees from the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
The warning was contained in a circular signed by NUPRC Chief Executive, Oritsemeyiwa Eyesan, dated September 14, 2026, with reference number NUPRC/1127/Vol.13/55 and obtained by Nairametrics.
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At least 62 successful awardees have been identified across the three licensing exercises, although the October 31 deadline applies specifically to holders whose acreages are not meeting their approved work commitments.
What the commission is saying
The NUPRC said the enforcement drive is intended to increase Nigeria’s oil and gas production by ensuring that licensed acreages are actively explored and developed.
- It said the PIA is built on the principle that “acreage is held to be worked, and acreage that is not worked within its term returns to the Federal Government.”
The commission cited Sections 77, 78 and 88 of the Act, alongside the default and revocation provisions in Sections 96 and 97, as the legal basis for its action.
It warned that enforcement could include refusing licence extensions, requiring operators to relinquish acreages, calling in work performance securities and initiating revocation proceedings.
According to the circular, a petroleum prospecting licence is granted for a defined initial exploration period, with any optional extension dependent on the acreage’s terrain and the fulfilment of the applicable work commitments.
The licence obligations include the terms contained in the licence instruments, General Licence Conditions, Concession Contract, Minimum Work Programme and Work Performance Security. The Commission said these documents must be read together, with continued ownership of the licence dependent on meeting the obligations within the prescribed term.
However, the regulator stressed that its immediate objective is to bring dormant or underperforming assets into production rather than automatically revoke licences.
- “The Commission’s objective is to increase production, not forfeiture,” it stated.
The NUPRC acknowledged that some licensees may face challenges involving financing, rig availability, insecurity, host community engagement, infrastructure, regulatory approvals and disputes among partners.
It directed affected operators to submit details of their compliance with licence obligations, including execution of approved work programmes, alongside the specific constraints affecting progress. They must also provide proposed mitigation measures and revised implementation timelines by October 31, 2026.
The commission said it would facilitate solutions where possible, but warned that such engagement would not extend licence terms or excuse contractual obligations. It added that it would not act beyond its statutory mandate, override agreed dispute-resolution mechanisms or the jurisdiction of the courts, or allow discussions with the regulator to suspend a licence’s term.
The circular also made clear that disputes among partners would not exempt operators from meeting their obligations.
- “Internal disagreement will not excuse failure to meet licence obligations,” it stated.
Get up to speed
The affected licences emerged from three recent exercises designed to attract investment and accelerate exploration across Nigeria’s petroleum sector.
- Under the 2020 Marginal Field Bid Round, the NUPRC issued 50 Petroleum Prospecting Licences to successful awardees. The commission had projected that the fields could produce about 58,000 barrels of oil per day and 87 million standard cubic feet of gas per day.
- The 2022 Mini Bid Round, conducted under the PIA framework, initially focused on seven deep offshore PPLs and sought to attract new investors to prospective petroleum acreages. The process later culminated in awards under the 2022/2023 Mini Bid Round.
- In July 2026, the NUPRC said 12 successful awardees had received 19 PPLs from the 2022/2023 Mini Bid Round and the 2024 Licensing Round. The licences cover deep offshore, shallow-water and continental-shelf acreages.
- The 2024 Licensing Round was launched as another effort to deepen exploration, offering opportunities across deep offshore, shallow-water and onshore areas.
The latest directive places operators from these rounds on notice that securing an acreage comes with continuing work obligations and that failure to meet them could trigger regulatory action.
What you should know
Nairametrics had earlier reported that the regulator had opened bids for 50 oil and gas blocks across five sedimentary basins for bidding and exploration in the 2025 licensing round in January.
The NUPRC said it had reduced the signature bonus for the round to between $3 million and $7 million.
The new bonus, which has presidential approval, is a reduction from the $10 million paid in 2024 and a huge drop from the approximately $200 million required some years ago.
The NUPRC had in December 2025 officially launched the 2025 Licensing Round, introducing a digital bid portal as the country moves to deepen investment and strengthen activities in the upstream sector.
