NUPRC enforces drill-or-drop rule for oil blocks

The Nigerian Upstream Petroleum Regulatory Fee has declared that the period of oil firms holding on to exploration licences for years with out growing the belongings is formally over, as new provisions below the Petroleum Business Act compel operators to both develop their fields or relinquish them.

The Fee Chief Govt of the NUPRC, Oritsemeyiwa Eyesan, disclosed this whereas receiving a delegation from the Petroleum Directorate of Sierra Leone on the fee’s headquarters in Abuja.

Eyesan additionally expressed satisfaction with the extent of investor curiosity recorded up to now in Nigeria’s 2025 oil licensing spherical, describing the variety of candidates as encouraging regardless of stricter bidding situations launched by the regulator.

This was contained in a press release issued on Friday by the Head of Media and Company Communications on the fee, Eniola Akinkuotu.

In line with Eyesan, the response from buyers to the licensing spherical has demonstrated renewed confidence in Nigeria’s upstream petroleum sector following regulatory reforms launched by the Petroleum Business Act.

She mentioned the continued train includes 50 oil blocks at present on provide, including that the robust degree of participation was recorded regardless of a rule limiting firms to a most of two blocks, whether or not bidding individually or as a part of a consortium.

“For the 2025 licensing spherical, now we have 50 oil blocks on provide. And the end result of the pre-qualification submission was an indication that there’s certainly an excellent urge for food for the bid spherical,” Eyesan mentioned.

She defined that the fee intentionally launched restrictions on the variety of blocks that firms can bid for as a way to stop asset hoarding and encourage wider participation from buyers.

In line with her, the coverage ensures that exploration belongings are allotted to firms which might be genuinely prepared to take a position and develop them. Eyesan additionally disclosed that the fee had taken further steps to strengthen transparency and investor confidence within the licensing course of.

She mentioned the regulator engaged an unbiased audit agency to assessment the digital bidding system and validate its integrity.

“With the intention to guarantee complete transparency within the licensing spherical, the fee added an additional layer of validation by partnering with a good audit agency to interrogate the system and validate that the system is foolproof. The results of that train will probably be made public simply to spice up investor confidence,” she said.

The NUPRC boss mentioned the introduction of the “drill or drop” provision below Part 94 of the Petroleum Business Act has essentially modified the way in which exploration licences are managed in Nigeria.

She famous that the availability compels operators to both begin exploration and growth actions inside a specified timeframe or give up the licence to the federal government.

In line with her, the reform has eradicated the longstanding observe the place firms held on to grease blocks for many years with out growing them.

Eyesan mentioned, “One of many beauties of the PIA is Part 94, which compels operators to both begin work or relinquish the licence, what we name the drill or drop provision.

“The PIA additionally opened alternatives for each small and massive gamers as a result of there’s now a drill or drop provision within the Act. So now we have cured the issue of uncertainties.”

She defined that previous to the reform, some operators retained prospecting licences for so long as 20 years with out finishing up significant exploration work, thereby slowing down Nigeria’s efforts to develop its petroleum reserves.

“Prior to now, we had operators who had 20-year licences and sat on these blocks and did completely nothing.

“Now now we have moved from that period to drill or drop. So now we have extra belongings within the basket, which has given us the impetus to even take into account holding bid rounds extra incessantly, probably on an annual foundation,” the CCE famous.

She added that the coverage shift has helped return extra dormant belongings to the federal government’s portfolio, thereby creating new alternatives for buyers within the ongoing licensing spherical.

In line with the fee, the renewed curiosity within the bid spherical may additionally assist Nigeria’s long-term purpose of accelerating its confirmed crude oil reserves and sustaining upstream investments.

Nigeria at present holds a number of the largest hydrocarbon reserves in Africa, however exploration exercise has slowed in recent times as a consequence of regulatory uncertainty, safety challenges, and world power transition pressures.

The enactment of the Petroleum Business Act in 2021 has helped restore investor confidence by introducing clearer fiscal phrases, improved regulatory frameworks, and stricter accountability necessities for operators.

In the meantime, the Director-Basic of the Petroleum Directorate of Sierra Leone, Foday Mansaray, mentioned his nation was searching for to be taught from Nigeria’s regulatory expertise in growing its personal hydrocarbon sector.

Mansaray defined that the delegation’s go to to the NUPRC was geared toward deepening bilateral cooperation and gaining insights into Nigeria’s petroleum governance framework.

“We’re right here to collaborate with the NUPRC at a bilateral degree and be taught from Nigeria, our huge brothers within the business,” he mentioned. “We’re a small nation of simply eight million folks, however very formidable, and we consider there’s a lot we will be taught from Nigeria’s expertise in managing the petroleum sector.”

He additionally known as for stronger power collaboration between each international locations and proposed the signing of a Memorandum of Understanding to formalise cooperation in regulatory capability constructing and petroleum sector growth.

The 2025 oil licensing spherical was formally launched in December 2025 following approval by President Bola Tinubu as a part of efforts to draw contemporary funding into the nation’s upstream petroleum sector.

The bid spherical affords 50 oil and gasoline blocks situated throughout a number of sedimentary basins, together with the Niger Delta, Anambra, Bida, Benue Trough, and Chad basins, with the target of boosting exploration exercise, growing reserves, and supporting long-term crude manufacturing development.

As of now, the method has accomplished the pre-qualification stage, with the submission window closing on February 27, 2026, after which certified firms are anticipated to proceed to the technical and business bidding part, the place bids will probably be evaluated earlier than remaining awards are introduced.

Total, the licensing spherical is anticipated to run for about eight months, from November 2025 to July 2026, when the business bid convention and remaining approvals are scheduled to conclude the method.