The Nigerian Upstream Petroleum Regulatory Commission has directed oil companies holding certain petroleum prospecting licences to report their compliance with licence requirements by October 31, 2026.
The directive applies to companies that received licences through the 2020 marginal field bid round, the 2022/2023 mini bid round and the 2024 licensing round.
In a circular signed by NUPRC Chief Executive Officer, Oritsemeyiwa Eyesan, the commission asked affected companies to provide details of their progress, challenges and plans for completing their approved work programmes.
The companies are expected to state how much of their licence obligations they have fulfilled, identify factors delaying their work and provide proposed solutions as well as revised timelines for meeting their commitments.
NUPRC said the directive was aimed at improving oil production and ensuring that companies operate within the limited periods attached to their licences.
The regulator warned that companies failing to meet their obligations could lose their licences under the “drill-or-drop” provisions of the Petroleum Industry Act 2021.
Under the law, a petroleum prospecting licence is issued for a specified exploration period, with any extension subject to conditions, including the fulfilment of agreed work commitments.
NUPRC said it could take several actions against companies that fail to perform, including refusing requests for extensions, demanding the surrender of acreage, enforcing work performance securities and beginning licence revocation proceedings.
However, the commission said the October 31 directive was a general advisory and should not be interpreted as a formal notice of default.
It acknowledged that companies could face difficulties arising from issues such as access to finance, availability of drilling rigs, security concerns, engagement with host communities, infrastructure, regulatory approvals and disagreements among partners.
NUPRC said it was prepared to help resolve challenges that fall within its legal responsibilities, including facilitating discussions among relevant parties.
The commission, however, stressed that such intervention would not extend licence periods, suspend existing obligations or override contractual dispute-resolution procedures or the authority of the courts.
