NUPRC Enforces “Drill or Drop” Rule, Boosting Investor Confidence in Nigeria’s 2025 Oil Licensing Round
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has officially ended the era of oil companies holding exploration licences for years without development. Under the Petroleum Industry Act (PIA), operators must now either develop their oil fields or relinquish them. NUPRC’s Chief Executive, Oritsemeyiwa Eyesan, highlighted this new “drill or drop” policy while hosting a delegation from Sierra Leone, emphasizing its role in fostering accountability and operational efficiency.
Eyesan noted that Nigeria’s 2025 oil licensing round has generated strong investor interest, with 50 oil blocks currently on offer. Despite limits restricting companies to a maximum of two blocks per bidder, participation remained robust, reflecting renewed confidence in Nigeria’s upstream petroleum sector. The commission also engaged an independent audit firm to validate the integrity of the digital bidding system, reinforcing transparency and trust among investors.
The “drill or drop” provision under Section 94 of the PIA compels operators to commence exploration and development activities within a specified timeframe or surrender the licence. According to Eyesan, this reform has ended decades-long practices where companies retained blocks for up to 20 years without meaningful activity. The policy also broadens opportunities for both large and small operators, creating a more competitive and dynamic upstream market.
By returning dormant assets to the government’s portfolio, the policy shift has opened new investment avenues in the ongoing licensing round. Eyesan explained that the move could accelerate Nigeria’s efforts to increase proven crude oil reserves and maintain sustainable upstream investments. The 2025 licensing round, which began in December 2025, spans multiple sedimentary basins, including the Niger Delta, Anambra, Bida, Benue Trough, and Chad basins, and is scheduled to conclude in July 2026.
Sierra Leone’s Petroleum Directorate delegation, led by Foday Mansaray, visited NUPRC to learn from Nigeria’s regulatory framework and explore bilateral cooperation. Mansaray emphasized the importance of shared expertise in developing hydrocarbon resources and proposed a Memorandum of Understanding for regulatory capacity building. The visit underscores Nigeria’s role as a leading model for upstream petroleum governance in West Africa.
source: punch