By Julius Peter, Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has reaffirmed October 31, 2026, as the deadline for holders of undeveloped oil and gas assets to commence development or risk relinquishing their licences to the Federal Government under the drill-or-drop policy.
The commission said the policy, anchored on Section 94 of the Petroleum Industry Act (PIA) 2021, was designed to end the prolonged retention of undeveloped petroleum assets, promote accountability among licence holders and ensure that oil and gas resources are harnessed for national economic development.
The NUPRC also expressed optimism that the newly awarded petroleum licences, supported by a structured onboarding programme for their holders, could contribute an additional 250,000 barrels per day to Nigeria’s crude oil production within five years.
The Commission Chief Executive, Mrs Oritsemeyiwa Eyesan, reiterated the October 31 deadline as the commission intensified efforts to ensure that companies holding petroleum licences fulfil their obligations or surrender the undeveloped acreage to the Federation.
Under the policy, companies that fail to meet the applicable exploration and development requirements within the stipulated timeframe risk losing their licences, allowing the government to make such assets available to more capable and committed investors.
The commission’s position represents a significant step in the implementation of the petroleum sector reforms introduced by the PIA, which established a clearer regulatory framework for managing Nigeria’s upstream oil and gas industry.
Before the enactment of the PIA in 2021, the allocation of oil blocks was largely discretionary, resulting in situations where some companies obtained petroleum assets without the technical expertise, financial strength or commercial capacity required to develop them.
Consequently, several oil blocks remained undeveloped for extended periods, limiting the country’s ability to maximise its petroleum resources, attract productive investments and increase crude oil output.
The NUPRC inherited this challenge when it was established in 2021 as the upstream petroleum regulator under the new legal framework.
To address the situation, the commission moved to enforce the provisions of the PIA, particularly Section 94, which provides the legal basis for requiring licence holders to meet their obligations and relinquish acreage where the applicable conditions are not fulfilled.
The resulting drill-or-drop policy seeks to ensure that petroleum licences are treated as instruments for productive investment rather than assets to be held indefinitely without meaningful exploration or development activities.
Through the policy, the commission has revoked more than 50 fallow fields that were not developed by their previous holders.
The affected assets were subsequently returned to the pool of available petroleum opportunities for reallocation to companies considered capable of undertaking the necessary exploration and development activities.
The exercise is expected to improve the utilisation of Nigeria’s petroleum resources, strengthen regulatory compliance and create opportunities for new investments in the upstream sector.
The NUPRC has maintained that the recovery and reallocation of undeveloped petroleum assets were conducted transparently, with industry operators and the Nigeria Extractive Industries Transparency Initiative (NEITI) cited as stakeholders that have attested to the transparency of the process.
NEITI is the government agency responsible for promoting transparency and accountability in Nigeria’s extractive industries, including the oil and gas sector.
The recovery of the fallow fields is part of broader efforts to ensure that petroleum assets are allocated to companies with the willingness and capacity to develop them, rather than remaining dormant while the country seeks to improve production and generate additional revenue.
By enforcing the law, the commission is seeking to establish a regulatory environment in which licence holders understand that the award of an oil block comes with clear obligations and measurable expectations.
The approach is also intended to strengthen investor confidence by ensuring that petroleum assets are managed within a framework of established rules, performance requirements and regulatory accountability.
Beyond enforcing the law and recovering undeveloped assets, the NUPRC has introduced an onboarding programme for companies awarded petroleum licences following the recovery and reallocation exercise.
The programme brings together approximately 22 companies, including established industry operators and new entrants, to equip them with the technical knowledge, regulatory guidance and operational understanding required to develop their newly acquired assets successfully.
Among the companies listed as beneficiaries are TotalEnergies, which secured Petroleum Prospecting Licences (PPLs) 2000 and 2001; Sahara Energy, awarded PPLs 270 and 271; First E&P, which secured PPLs 2003 and 2006; and MRS, awarded PPL 303.
The participation of established industry players alongside new entrants is expected to provide an opportunity for the exchange of experience and the adoption of effective approaches to petroleum exploration and field development.
According to the commission, the onboarding programme is intended to help the new licence holders learn from the shortcomings of previous operators who failed to develop the assets entrusted to them.
The initiative also reflects the NUPRC’s position that regulation should extend beyond the enforcement of sanctions to include practical support that enables compliant operators to meet their obligations and achieve commercial success.
Through the programme, the commission is seeking to ensure that the new awardees understand the technical, financial, operational and regulatory requirements involved in developing petroleum assets within the prescribed timeframe.
A major objective of the onboarding initiative is to accelerate the transition of the newly awarded assets from exploration to development and production.
The NUPRC is targeting an additional 250,000 barrels per day in national crude oil production from the assets within five years.
The commission expects the new licence holders to move from exploration into subsequent stages of development within the stipulated period, with the onboarding programme designed to help them avoid delays that affected previous holders.
The production target is significant to Nigeria’s efforts to increase crude oil output, improve government revenue and strengthen the contribution of the petroleum industry to the national economy.
Higher production, where commercially viable and achieved within the applicable regulatory and operational requirements, could also support job creation, stimulate demand for local goods and services and create opportunities for Nigerian companies participating in the oil and gas value chain.
The anticipated benefits extend beyond direct crude oil sales to include employment for engineers, geologists, technicians, field workers and other professionals involved in exploration, drilling, construction, production and related services.
In addition, increased upstream activity could create opportunities for indigenous service providers and other businesses supplying equipment, logistics, engineering and technical support to petroleum operators.
For the government, the successful development of the assets could translate into additional petroleum-related revenue, provided the production targets are achieved and the associated investments remain commercially sustainable.
The commission’s approach underscores its intention to combine regulatory discipline with measures aimed at facilitating investment and production growth.
Rather than relying exclusively on the revocation of licences, the NUPRC is seeking to prepare the new awardees for the practical demands of developing petroleum assets in a competitive and technically complex industry.
The onboarding programme is therefore expected to provide a platform for the commission’s subject-matter experts and experienced industry professionals to share knowledge on how companies can develop their assets more efficiently.
The initiative also seeks to reinforce the understanding that the ownership of a petroleum licence carries responsibilities to invest, explore and develop resources in accordance with the law and the applicable licence conditions.
For new entrants, the programme offers an opportunity to familiarise themselves with regulatory expectations and industry practices, while established operators can draw on their experience to pursue development plans more effectively.
The NUPRC believes that improving the capacity of licence holders to execute their projects will be essential to achieving the production target and ensuring that the recovered assets do not become dormant under their new owners.
As the onboarding programme continues, the NUPRC has made it clear that the deadline for existing licence holders to meet their obligations remains October 31, 2026.
Companies that fail to develop their assets in line with the applicable requirements risk losing their licences, with the undeveloped acreage to be relinquished to the Federation for possible reallocation to more committed operators.
The deadline is expected to reinforce the commission’s determination to prevent the continued accumulation of fallow petroleum assets and ensure that licence holders demonstrate tangible progress towards development.
The enforcement drive also sends a message to investors that the upstream petroleum sector is operating under a framework in which licence awards must be matched by performance and compliance.
The commission’s position is that the country’s petroleum resources must be developed in a manner that promotes investment, production, employment and economic value rather than allowing valuable acreage to remain idle.
Building capacity for sustainable production growth
The second day of the onboarding programme features presentations and discussions involving NUPRC subject-matter experts and external industry veterans, focusing on practical approaches to developing oil and gas assets within the shortest possible time.
The commission has encouraged stakeholders and interested members of the public to follow the programme through its official social media platforms, where the sessions are being streamed live.
The programme forms part of the commission’s broader efforts to support the implementation of the PIA, improve the utilisation of petroleum assets and strengthen Nigeria’s upstream petroleum industry.
For the NUPRC, the ultimate test of the drill-or-drop policy will be whether the recovered assets are successfully developed, production increases and the expected economic benefits are delivered to Nigerians.
With the October 31 deadline approaching, the commission’s renewed emphasis on compliance and the onboarding of new licence holders signals a determination to move the industry away from prolonged asset dormancy towards a more productive and performance-driven petroleum sector.
If successfully implemented, the initiative could help unlock previously stranded petroleum opportunities, attract fresh investment, create jobs and support the government’s efforts to increase crude oil production and revenue.
