The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has officially moved to end the long-standing practice of oil companies holding onto exploration licences without developing them. Under the Petroleum Industry Act (PIA), operators are now required to either begin exploration and development within a set timeframe or relinquish their licences to the government.
The announcement was made by NUPRC Chief Executive, Oritsemeyiwa Eyesan, during a meeting with officials from the Petroleum Directorate of Sierra Leone, who visited Abuja to learn from Nigeria’s petroleum regulatory framework.
Eyesan highlighted that the 2025 oil licensing round, currently underway, has drawn strong investor interest, even with stricter bidding rules. This round offers 50 oil blocks, with companies restricted to a maximum of two blocks each, to prevent hoarding and encourage wider participation.
“The drill-or-drop provision in Section 94 of the PIA has transformed how exploration licences are managed,” Eyesan said. “Operators can no longer sit on blocks for decades without development, ensuring assets are allocated to investors ready to act.”
The commission also introduced additional transparency measures, including an independent audit of its digital bidding system, to bolster investor confidence.
According to Eyesan, this policy shift has returned previously dormant assets to the government, opening new opportunities for investors and supporting Nigeria’s goal of expanding crude oil reserves and sustaining upstream investment.
Sierra Leone’s delegation, led by Director-General Foday Mansaray, expressed interest in Nigeria’s regulatory approach and proposed closer collaboration, including a potential Memorandum of Understanding for knowledge sharing and capacity building in the petroleum sector.
The 2025 licensing round, approved by President Bola Tinubu, is expected to conclude in July 2026. It covers multiple basins, including the Niger Delta, Anambra, Bida, Benue Trough, and Chad basins, aiming to increase exploration activity and strengthen Nigeria’s position as a leading hydrocarbon producer in Africa.
