By| Goodluck E.Adubazi, Abuja
The Nigerian Upstream Regulatory Commission (NUPRC) has given holders of Petroleum Prospecting Licences (PPLs) awarded under the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round until October 31, 2026, to disclose impediments affecting their work programmes or risk enforcement action, including possible revocation of their licences.
The Commission, in a circular titled “Notice of Enforcement of the Drill-or-Drop Provisions of the Petroleum Industry Act, 2021,” said the directive was part of efforts to increase oil and gas production by ensuring that licensed acreages are actively worked.
NUPRC reminded licence holders that their petroleum prospecting licences carry statutory work commitments, including the timely execution of approved work programmes within the defined licence period.
According to the Commission, the Petroleum Industry Act (PIA) operates on the principle that acreage is granted to be worked, while acreage that remains undeveloped within its prescribed term should return to the Federal Government.
It said the principle is backed by Sections 77, 78 and 88 of the PIA, as well as the default and revocation provisions contained in Sections 96 and 97.
The Commission warned that it would enforce the provisions against non-performing acreages through measures including refusal of licence extensions, requiring relinquishment, calling in work performance securities and commencing revocation proceedings.
However, NUPRC stressed that its objective was to increase production rather than pursue forfeiture, acknowledging that licence holders could face challenges relating to financing, rig availability, security, host community engagement, infrastructure, regulatory approvals and disputes among partners.
The Commission therefore directed affected licensees experiencing such constraints to notify it on or before October 31, 2026, providing details of their level of compliance with licence obligations, specific challenges affecting implementation, proposed mitigation measures and a revised timeline for completing their work programmes.
NUPRC further cautioned that engagement with the Commission would not suspend the term of a licence or excuse a licensee from fulfilling its statutory obligations.
It also warned that internal disagreements among partners would not constitute an excuse for failing to meet licence commitments, urging companies to ensure that partnership and financing agreements clearly provide for participating interests, operatorship, deadlocks, cash calls, defaults, assignments, changes of control and binding dispute-resolution mechanisms that allow operations to continue.
The Commission said it remained willing, within the limits of its statutory mandate, to intervene or facilitate discussions where disputes or other challenges were affecting timely performance.
The circular was issued by the Commission’s Executive Commissioner’s office for Exploration and Acreage Management, with enquiries directed to Bashari Indabawa.
The directive forms part of NUPRC’s broader regulatory drive to ensure that awarded oil and gas acreages are actively developed and contribute to increased national production.
