Nigeria to withdraw idle oil blocks as NUPRC cracks down on non-performing licence holders

By Onu Okorie

Nigeria’s upstream oil regulator has fired a warning shot at licence holders sitting on undeveloped acreage, threatening revocation, relinquishment and forfeiture of financial guarantees unless companies get drilling — or give up their blocks.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) issued the notice to holders of Petroleum Prospecting Licences from the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round, and the 2024 Licensing Round, invoking the “drill-or-drop” provisions of the Petroleum Industry Act 2021. The message is blunt: licences are not permanent assets. They run for a fixed term, and the acreage attached to them must be actively worked or it reverts to the state.
At the heart of the crackdown is a push to lift national production, which has lagged for years amid divestments by international majors, ageing infrastructure and stalled investment decisions on marginal fields. The Commission pointed to sections of the PIA governing licence default and revocation as its legal footing, and set out a menu of sanctions for non-performing acreage — refusal of licence extensions, forced relinquishment, calling in performance securities, and outright revocation.
Yet regulators appear wary of triggering a wave of licence losses that could spook investors already skittish about Nigeria’s upstream sector. The circular strikes a conciliatory note alongside its threats, acknowledging that operators may be stalled by financing constraints, rig scarcity, insecurity, community tensions, infrastructure gaps or regulatory bottlenecks. Companies facing such hurdles have been given until 31 October 2026 to disclose their compliance status, explain what is holding them back, and propose a corrective timeline.
The Commission singled out partner disputes as a particular drag on development, pressing operators to tighten joint venture and financing agreements around operatorship, cash calls, deadlock and dispute resolution — while making clear that boardroom disagreements between partners will not be accepted as an excuse for missed obligations.
Still, the regulator was careful to draw boundaries around its own power. It stressed the circular does not itself constitute a default notice, will not override existing dispute-resolution clauses or court jurisdiction, and cannot be used by licensees to pause the clock on their licence terms.
The notice was signed by Commission Chief Executive Oritsemeyiwa Eyesan, with enquiries directed to Executive Commissioner Bashari Indabawa.
The move signals that after years of urging patience, Nigeria’s regulator is now prepared to use the full force of the PIA to reclaim acreage from licence holders who fail to convert exploration rights into actual production.