The Nigerian Upstream Petroleum Regulatory Commission(NUPRC) has declared an end to the long-standing practice of oil companies holding exploration licences without developing them, following new provisions introduced under the Petroleum Industry Act.
The Commission Chief Executive, Oritsemeyiwa Eyesan, made this known while receiving a delegation from Sierra Leone’s Petroleum Directorate in Abuja.
Eyesan explained that the “drill or drop” provision under Section 94 of the PIA now compels operators to either commence exploration and development activities within a specified timeframe or relinquish their licences to the government.
“One of the beauties of the PIA is Section 94, which compels operators to either commence work or relinquish the licence,” she said, noting that the reform has eliminated uncertainty and asset hoarding in the sector.
According to her, the policy marks a significant shift from the past, where some companies held oil blocks for up to 20 years without meaningful exploration, slowing Nigeria’s efforts to grow its petroleum reserves.
She added that the reform has returned dormant assets to the government, creating fresh opportunities for investors and enabling the regulator to consider more frequent licensing rounds.
Eyesan also expressed satisfaction with the level of investor interest in Nigeria’s 2025 oil licensing round, describing participation as strong despite stricter bidding rules.
“For the 2025 licensing round, we have 50 oil blocks on offer, and the outcome of the pre-qualification stage shows a very good appetite for the bid round,” she stated.
The commission introduced a cap limiting companies to a maximum of two blocks per bid, whether individually or as part of a consortium, to prevent monopolisation and encourage wider participation.
To further boost transparency, the regulator engaged an independent audit firm to validate the integrity of its digital bidding system, with results expected to be made public.
The NUPRC noted that renewed investor confidence in the upstream sector is largely driven by reforms introduced under the PIA, which established clearer fiscal terms and improved regulatory frameworks.
Nigeria, which holds some of the largest hydrocarbon reserves in Africa, has struggled with declining exploration activity in recent years due to regulatory uncertainty, security challenges, and global energy transition pressures.
However, the ongoing licensing round—approved by Bola Tinubu in December 2025—is expected to attract fresh investment and support the country’s goal of increasing proven reserves.
The bid round covers 50 oil and gas blocks across key basins, including the Niger Delta, Anambra, Bida, Benue Trough, and Chad basins. The process, which began in late 2025, is scheduled to conclude in July 2026 after technical and commercial evaluations.
Meanwhile, the Director-General of Sierra Leone’s Petroleum Directorate, Foday Mansaray, said his country is seeking to learn from Nigeria’s regulatory experience.
“We are here to collaborate and learn from Nigeria,” Mansaray said, adding that Sierra Leone hopes to deepen bilateral cooperation and explore a formal agreement on capacity building in the petroleum sector.
The NUPRC emphasised that stronger governance, transparency, and enforcement of development timelines will be key to sustaining long-term investment and growth in Nigeria’s upstream oil industry.
