Nigeria: NUPRC Gives Oil Exploration Licence Holders Until October 31 To Report Their Compliance Status

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has given holders of Petroleum Prospecting Licences (PPLs) awarded under the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round, and 2024 Licensing Round until October 31, 2026, to notify the commission of their compliance status, constraints, proposed mitigation measures, and revised implementation timelines.

The directive, issued by the commission’s Chief Executive Officer, Oritsemeyiwa Eyesan, is part of efforts to increase production and remind licensees of the finite terms of their licences and their obligation to execute approved work programmes within the timelines prescribed by law.

“Licensees experiencing such constraints are encouraged to notify the Commission not later than 31 October 2026, stating: the level of compliance with their licence obligations, including the execution of the approved work programme; the specific constraints affecting execution; the proposed mitigation measures; and revised implementation timelines,” the commission said.

The commission urged holders of non-performing licences from the bid rounds to fulfil their work commitments or risk losing their licences, saying it would enforce the “drill-or-drop” provisions of the Petroleum Industry Act (PIA) 2021.

“A Petroleum Prospecting Licence is granted under Section 77 of the Act for a defined initial exploration period, with an optional extension determined by the terrain of the acreage and conditional upon discharge of the work commitment applicable to the initial period,” the commission said.

“The grant carries with it the obligations contained in the instruments constituting the licence, the General Licence Conditions, the Concession Contract, the Minimum Work Programme and the Work Performance Security, which are to be read as one. It is performance of those obligations within the term that entitles a licensee to continue to hold the licence.”

NUPRC said it would enforce the provisions of the PIA on all non-performing acreages by refusing extensions, requiring relinquishment, calling in work performance securities, and commencing revocation proceedings.

The commission, however, clarified that the communication is a general advisory and does not constitute a notice of default under the PIA or its subsidiary instruments.

Furthermore, NUPRC acknowledged that financing, rig availability, security, host-community engagement, infrastructure, regulatory approvals, and partner arrangements may impede performance. It said it is therefore willing, within the limits of the law, to assist licensees in resolving such challenges.

The commission said it would not assume jurisdiction beyond its statutory mandate, override any agreed dispute-resolution mechanism or the jurisdiction of the courts, or allow engagement with it to suspend a licence term or excuse the performance of any obligation.

NUPRC said, however, that it could intervene or facilitate discussions where such action falls within its mandate and assist parties in resolving issues that could affect the timely fulfilment of their obligations.