NUPRC Warns Non-Performing Licensees Over ‘Drill-or-Drop’ Deadline

NUPRC Warns Non-Performing Licensees Over ‘Drill-or-Drop’ Deadline

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced plans to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021, warning holders of non-performing petroleum licences to meet their statutory work commitments or risk losing their licences.

The Commission, in a circular signed by its Chief Executive, Mrs Oritsemeyiwa Eyesan, urged holders of Petroleum Prospecting Licences (PPLs) awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round and 2024 Licensing Round to comply with their approved work programmes within the timelines prescribed by law.

The circular, referenced NUPRC/1127/VOL.13/55, said the enforcement was in furtherance of the national drive to increase oil and gas production and to remind licensees that their licences have finite terms and come with statutory obligations.

The Commission, however, acknowledged that several factors could hinder licensees from meeting their commitments, including financing challenges, rig availability, insecurity, host-community engagement, infrastructure limitations, regulatory approvals and partner arrangements.

NUPRC said it was willing, within the limits of the law, to assist affected licensees in addressing such challenges and improving the implementation of their approved work programmes.

The affected licensees have been given until October 31, 2026, to notify the Commission of their compliance status and provide details of any constraints affecting the execution of their obligations.

According to the circular, licensees experiencing challenges are required to state their level of compliance with their licence obligations, including the execution of approved work programmes; identify the specific constraints affecting implementation; and provide proposed mitigation measures and revised implementation timelines.

The Commission warned that failure to meet statutory work commitments could trigger the “Drill-or-Drop” provisions applicable under the PIA.

NUPRC Warns Non-Performing Licensees Over ‘Drill-or-Drop’ Deadline