The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says oil companies will no longer be allowed to hold exploration licences for extended periods without developing the assets, as new provisions under the Petroleum Industry Act (PIA) compel operators to either commence work on their blocks or relinquish them.
The Commission Chief Executive of the NUPRC, Oritsemeyiwa Eyesan, made the disclosure while hosting a delegation from the Petroleum Directorate of Sierra Leone at the commission’s headquarters in Abuja.
According to her, the “drill-or-drop” provision contained in Section 94 of the PIA now requires licence holders to begin exploration and development activities within a specified timeframe or return the assets to the government.
Eyesan said the reform is designed to end the longstanding practice where companies retained oil blocks for many years without undertaking meaningful exploration work.
She explained that under the previous system, some operators held prospecting licences for up to two decades without advancing development, a situation that slowed the country’s efforts to expand its hydrocarbon reserves.
The NUPRC chief added that the policy has already helped return several dormant assets to the government’s portfolio, creating additional opportunities for investors as Nigeria seeks to expand upstream activities.
Eyesan also expressed satisfaction with the level of investor participation recorded so far in Nigeria’s 2025 oil licensing round, noting that the number of applicants reflects renewed confidence in the country’s upstream sector following regulatory reforms introduced by the PIA.
She said the current bid round offers 50 oil and gas blocks, with participation remaining strong despite a new rule limiting companies to bidding for a maximum of two blocks, either individually or as part of a consortium.
According to her, the restriction was introduced deliberately to prevent asset hoarding and ensure that exploration rights are awarded to companies with the financial and technical capacity to develop them.
The commission also implemented additional measures aimed at strengthening transparency in the licensing process. Eyesan disclosed that an independent audit firm was engaged to review and validate the digital bidding platform used for the exercise.
She said the results of the system audit would be made public to reinforce investor confidence and demonstrate the integrity of the licensing process.
Nigeria launched the 2025 oil licensing round in December 2025 following approval by Bola Tinubu, as part of efforts to attract fresh investment into the upstream petroleum sector.
The exercise covers oil and gas blocks located across several sedimentary basins, including the Niger Delta, Anambra Basin, Bida Basin, Benue Trough, and Chad Basin, with the aim of boosting exploration activity and increasing Nigeria’s proven crude oil reserves.
The process has already completed the pre-qualification phase, with submissions closing on February 27, 2026. Qualified applicants are expected to move to the technical and commercial bidding stages before final awards are announced.
The licensing round is scheduled to run for about eight months, from November 2025 to July 2026, when the commercial bid conference and final approvals are expected to conclude the exercise.
During the visit, the Director-General of the Petroleum Directorate of Sierra Leone, Foday Mansaray, said the delegation came to learn from Nigeria’s regulatory experience as the country works to develop its own petroleum industry.
He added that Sierra Leone was interested in strengthening cooperation with Nigeria and exploring the possibility of signing a memorandum of understanding to support regulatory capacity building and broader collaboration in the energy sector.