The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has moved to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021, warning holders of non-performing petroleum prospecting licences (PPLs) that they risk losing their acreages if they fail to meet statutory work commitments.
The affected licences cover PPLs awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round.
The warning is contained in a circular signed by the Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, and addressed to the affected licensees.
The circular, referenced NUPRC/1127/VOL.13/55 and dated September 18, 2026, forms part of the Commission’s efforts to increase crude oil and gas production while ensuring that petroleum acreages are actively developed within the periods prescribed by law.
According to the NUPRC, the finite nature of petroleum licences means that holders must execute their approved work programmes within the stipulated timelines.
The Commission stressed that the PIA is founded on a straightforward principle: an acreage is awarded to be worked, and acreage that is not worked within its term ultimately returns to the Federal Government.
The principle, the Commission said, is backed by Sections 77, 78 and 88 of the PIA, alongside the default and revocation provisions contained in Sections 96 and 97.
Consequently, the NUPRC said it would begin enforcing the relevant provisions against non-performing acreages, including measures such as refusing licence extensions, requiring relinquishment, calling in work-performance security and commencing revocation proceedings.
“Performance of those obligations within the term is what entitles a licensee to continue to hold the licence,” the Commission stated.
Production, not forfeiture
The regulator, however, emphasised that its primary objective is to stimulate petroleum production rather than merely revoke licences.
“The Commission’s objective is to increase production, not forfeiture,” the circular stated.
The NUPRC acknowledged that several factors could affect the ability of licensees to meet their commitments, including access to financing, rig availability, insecurity, host-community engagement, infrastructure constraints, regulatory approvals and partner arrangements.
It said it was prepared, within the limits of its statutory mandate, to work with affected licensees to address legitimate challenges and facilitate the implementation of approved work programmes.
October 31 deadline
The Commission has therefore directed affected licensees experiencing performance challenges to provide detailed information on their compliance status not later than October 31, 2026.
The submissions are expected to state:
The level of compliance with licence obligations, including execution of the approved work programme; the specific constraints affecting implementation; proposed mitigation measures; and a revised implementation timeline.
The NUPRC warned, however, that engagement with the Commission would not suspend the statutory term of a licence or relieve a licensee of its obligations.
It also cautioned that it would not assume jurisdiction beyond its statutory mandate and made clear that partner disputes or internal disagreements would not constitute a shield against enforcement.
The regulator said internal disagreements among partners would not excuse failure to meet obligations attached to the licence.
The affected licensees have consequently been urged to submit the required information within the stipulated deadline and demonstrate concrete steps towards fulfilling their statutory commitments.
The latest move signals a more rigorous enforcement of the PIA’s acreage-management framework as the Federal Government seeks to unlock dormant assets, attract investment into upstream activities and raise Nigeria’s oil and gas production.
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