The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Tuesday urged 22 firms holding new Petroleum Prospecting Licences (PPLs) to deliver first oil within the next 18 months, warning that idle acreages will be recovered from October 30, 2026 in line with the ‘Drill or Drop’ provision of the Petroleum Industry Act (PIA) 2021.
Commission Chief Executive of NUPRC, Mrs Oritsemeyiwa Eyesan, gave the charge in Lagos at the maiden Onboarding Workshop for awardees of the 2022/2023 Mini Bid Round and the 2024 Licensing Round, themed: “From Award to Production: Delivering Nigeria’s Upstream Petroleum Potential Under the Petroleum Industry Act 2021.”
However, Eyesan disclosed that all the 22 awardees have successfully paid their signature bonuses.
She added that about 250,000 barrels per day oil production volume was being expected from the awardees and the assets in the next five years.
Eyesan said the workshop became necessary after a review of past bid rounds showed that many licence holders struggled to progress from award to production despite meeting financial obligations, a pattern that contributed to stalled oil production and reserves growth.
She recalled that the 2020 bid round was the most challenging in the Commission’s history due to ‘false marriages’ among bidders who partnered to win blocks and separated afterwards, leaving assets on shaky foundations.
Similar challenges, she noted, were recorded in earlier marginal field rounds and the 2010-2012 divestments where some operators took assets without the specialised business and technical capacity to run them.
The CCE said the industry produced three categories of operators in that period. According to her, some good operators grew assets that had zero production to over 60,000 barrels per day, while some brownfields that previously aggregated 60,000 to 80,000 barrels when held by previous owners declined to 20,000 to 30,000 barrels under new operators.
She said some companies even ran oil and gas accounting on excel sheets, underscoring lack of proper structures.
Eyesan pointed out that a common practice at the time was for awardees to muster technical teams to bid and disband them immediately after winning, then sit on assets while purportedly searching for technical partners and financing, only to return after two and a half years to seek extension.
To reverse the trend, Eyesan said the Commission has issued a circular that effective October 30, all licences with no activity within statutory timelines – three years onshore and five years offshore – will be recovered.
She stressed that extension will not be automatic and inability to secure partners or funding will no longer be acceptable grounds.
“I issued a circular, a directive, that by the 30th of this month, those who were awarded licenses, and have not done anything within the stipulated time, onshore for three years, and those offshore five years, the Commission will recover those blocks,” she warned.
“And somebody asked me, is it not just empty threats? Well, if you want to wait and see, I wish you good luck, wait and see what will happen. It’s going to be Drill or Drop. This is standard practice all over the world,” she added.
The NUPRC boss said the Commission is repositioning from strict regulator to business enabler committed to predictability, clarity and speed in approvals.
She said some approval timelines have been drastically shortened and the Commission is working to close remaining gaps in responsiveness before the end of the year, assuring operators that if timelines are stated as 180 days, they will be 180 days or less.
She said the onboarding workshop over two days will walk awardees through the entire value chain, including regulatory requirements, when and how to engage the Commission, cost competitiveness, benchmarking against peers through industry associations, and responsibilities of an operator.
She stressed that owning and running an asset requires a different mindset from working as an employee.
Eyesan described the 22 awardees as forerunners who have already collected licence instruments and contracts and should be ready to hit the ground running.
She urged them to leverage peer learning, industry associations and Commission support to avoid past mistakes, noting that trade groups within the upstream sector have helped raise standards and solve common problems including the ongoing industry cost benchmarking study.
She set a clear performance target, saying the Commission expects more than half of the 22 awardees to achieve first oil within two years and drill second wells within three to four years.
Eyesan announced that NUPRC will work with the Nigerian National Petroleum Company Limited (NNPC) to de-risk frontier basins and attract investments.
Reiterating the urgency, she charged the new operators to move decisively from award to production to support Nigeria’s reserves and production growth agenda under the PIA. “And, again, I want to see your first oil in 18 months,” Eyesan declared.
Meanwhile, bankers, legal professionals and existing oil and gas operating companies have advised that the 22 awardees seeking to raise funding within the next six months must demonstrate character, compliance and governance to be bankable.
The panel, which discussed the topic: “Structuring the Partnership: Matching Capital, Capabilities, and Control to the Assets”, said financiers are looking beyond technical promises to integrity, track record and who the sponsors really are.
In his submission, Executive Principal, Standard Chartered Bank Nigeria, Mr. Akinlade Thomas-Owoseni, said character is over-flogged because everybody is looking at integrity.
He stressed that sponsors of oil blocks must show competence and clear understanding of what they are doing, with financiers unpacking stories behind the scene before considering any credit.
Assistant General Manager/Head of Energy and Power, Fidelity Bank Plc, Mr. Emeka Nkemakolam, said investors want to see a clear strategic funding plan and level of compliance with award conditions, including payment of rent, signature bonus and performance bond obligations.
He noted that compliance signals a serious and compliant organization that financiers can work with.
The panelists flagged governance and documentation as key bankability requirements, insisting that joint venture documents, shareholder agreements and internal relationships must be in shape within six months in a form bankers can rely on.
They added that good corporate structure, clear conflict resolution mechanisms and a clean, technically feasible and fundable work programmewill enable quick execution, alongside alignment of values, culture and behaviour.
Beyond integrity and paperwork, the panel said technical data remains decisive, noting that the asset funds itself when data is robust.
They advised awardees to ensure they have competent, up-to-date business reports and technical data.
They warned that while contracts are important, trust between partners matters more, as even 51 pages of legal protection cannot substitute for alignment on vision and word.
Peter Uzoho
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