Drill or Drop: NUPRC Gives Non-performing Oil Licencees Six-week Grace

Drill or Drop: NUPRC Gives Non-performing Oil Licencees Six-week Grace .Urges them to meet statutory work commitments or lose permits Emmanuel Addeh in Abuja The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday announced that it was set to enforce the “drill-or-drop” provisions of the Petroleum Industry Act (PIA) 2021, urging holders of non-performing licenses to intimate with the status of their operations in six weeks. Specifically, the commission identified the winners of the 2020 marginal field bid round, the 2022/2023 mini bid round and the 2024 licensing round as the target of the directive, instructing them to meet their statutory work commitments or risk losing their licences. A statement by the NUPRC spokesman, Eniola Akinkuotu, indicated that the notice was contained in a circular signed by the Commission Chief Executive, Mrs. Oritsemeyiwa Eyesan, and addressed to holders of the Petroleum Prospecting Licenses (PPLs). According to the NURPC, the circular with reference number NUPRC/1127/VOL.13/55 was issued in furtherance of the national drive to increase production and to remind licensees of the finite term of their licences and their obligations to execute approved work programmes within the timelines prescribed by law. The NUPRC, through the circular, emphasised that the PIA is built around a straightforward principle that “an acreage is held to be worked, and any acreage that is not worked within its term returns to the federal government.” “The principle is backed by Sections 77, 78 and 88 of the PIA, as well as the default and revocation provisions of Sections 96 and 97,” the upstream commission stated. The commission emphasised that it has given notice to the affected firms that it intends to enforce the provisions “in respect of all non-performing acreage”, with measures including “refusing extension, requiring relinquishment, calling in the work performance security and commencing revocation proceedings.” According to the NUPRC, the continued possession of a licence depends on meeting the obligations attached to it. “It is performance of those obligations within the term that entitles a licensee to continue to hold the licence,” the circular read in part. However, the commission stated that the overall objective is to increase production rather than simply take away licences. “The commission’s objective is to increase production, not forfeiture,” the circular stated The NUPRC also acknowledged that financing, rig availability, security, host-community engagement, infrastructure, regulatory approvals and partner arrangements may impede performance and is therefore willing within the limits of the law, to assist licensees in resolving such challenges. “Affected licensees have until October 31, 2026 to notify the commission of their compliance status, constraints, proposed mitigation measures and revised implementation timelines. Licensees experiencing such constraints are encouraged to notify the commission not later than 31 October 2026. “(They should state) the level of compliance with licence obligations including the execution of approved work programmes; the specific constraints affecting execution; and the proposed mitigation measures and revised implementation timeline,” the circular added. The commission noted that it will not assume jurisdiction beyond its statutory mandate” or permit engagement to suspend a licence term or excuse performance. The NUPRC further warned that partner disputes will not provide a shield against enforcement, while internal disagreement will not excuse failure to meet licence obligations. “All affected licensees are therefore urged to submit the required information within the stipulated deadline,” the upstream regulator stated.