The Federal Government of Nigeria, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has officially declared an end to the era of oil companies holding petroleum assets without developing them.
​Under the strict enforcement of the “Drill-or-Drop” provisions embedded in the Petroleum Industry Act (PIA) 2021, regulatory authorities have insisted that petroleum prospecting licence (PPL) holders must either actively invest in production or forfeit their assets to the government.
​In a decisive move to curb asset speculation, the NUPRC has already retrieved over 50 dormant oil blocks from non-performing awardees for immediate reallocation to capable investors. Licensees currently facing operational constraints have been given until October 31, 2026, to submit comprehensive technical and financial execution plans or face outright license revocation.
To ensure rapid field development, the Commission has mandated a strict 18 to 24-month timeframe for all new PPL holders to achieve their first oil production.
​Speaking at an industry engagement session held at 10:00 AM on October 20, 2026, at the NUPRC Headquarters in Abuja, top executives of the regulatory body reiterated that “acreage warehousing”, the practice of holding idle oil blocks speculatively, will no longer be tolerated in Nigeria’s upstream sector.
​”It’s going to be Drill or Drop. This is standard practice worldwide, in the UK, in the Netherlands, all over the world,” stated Mrs. Oritsemeyiwa Eyesan, Commission Chief Executive Officer of the NUPRC. “We want to see that in the next two years, more than half of you have reached first oil. In the next three to four years, you are drilling your second well. The Commission will no longer grant automatic extensions.”
​Adding to the regulator’s firm stance, Ms. Enuma Shaw, Head of Acreage Management at NUPRC, clarified what constitutes an active block under the new guidelines during a media briefing in Abuja:
​”Acreage warehousing is a no-no. A working acreage is one that has active operations, where money is being spent, seismic data is being acquired, long-lead items are ordered, and drilling contracts are executed. Any asset left idle will immediately revert to the national pool.”
​The NUPRC warned operators across the 2020 Marginal Field Bid Round, 2022/2023 Mini Bid Round, and 2024 Licensing Round that internal corporate disagreements, partner disputes, or lack of financing will not be accepted as valid excuses for non-performance.
​Under the regulatory standards set by the Petroleum Industry Act, operators are required to stick strictly to mandatory exploration work programs, including seismic studies and well-drilling timelines, or face immediate asset revocation under the “Drill-or-Drop” rule.
Furthermore, licensees are expected to achieve initial production within an 18 to 24-month window following their award, with non-compliance resulting in the prompt forfeiture of the block back to the national pool.
To satisfy the commercialisation criteria, companies must demonstrate active capital deployment and execute binding contractor agreements; failure to meet these operational benchmarks will trigger the reallocation of the assets through competitive bidding processes.
​The government’s aggressive crackdown on idle licences is designed to boost Nigeria’s daily crude oil and gas production to meet national targets of 2 million barrels per day (bpd) and unlock long-term energy security.
​By enforcing the PIA’s provisions, the NUPRC aims to transition the country from a passive resource holder into an active, value-retaining energy market, ensuring that capital allocated to the petroleum sector translates directly into active drilling rigs and domestic economic growth.
