NUPRC Enforces Drill-or-Drop Rule
Nigeria has ended the era of “paper oil” by enforcing strict relinquishment rules for exploration licences. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) confirmed that operators must now develop assets or lose them. This “drill-or-drop” provision, enshrined in Section 94 of the Petroleum Industry Act, targets companies that previously held blocks for decades without investment. Oritsemeyiwa Eyesan, the Commission Chief Executive, announced the shift during a diplomatic visit from Sierra Leone’s petroleum directorate.
The 2025 licensing round has already attracted significant investor interest despite these more demanding terms. Currently, 50 oil blocks are on offer across several sedimentary basins, including the Niger Delta and Benue Trough. The NUPRC has restricted individual companies and consortia to a maximum of two blocks each. This cap is designed to prevent the hoarding of assets and encourage a broader range of participants. Preliminary results from the pre-qualification stage show a healthy appetite for the available acreage.
Transparency remains a central pillar of the current bidding process to restore international confidence. The commission has engaged an independent audit firm to validate the integrity of its digital bidding system. This extra layer of scrutiny aims to prove the process is foolproof before final awards are announced. By making the audit results public, the regulator hopes to distance itself from past accusations of opacity. Such measures are vital for attracting the long-term capital required for deepwater exploration.
The regulatory environment has changed fundamentally since the Petroleum Industry Act was signed in 2021. Previously, some operators retained prospecting licences for 20 years without ever moving a drill bit. These dormant assets slowed Nigeria’s efforts to expand its proven crude oil reserves. The new framework allows the government to return these blocks to the national portfolio more efficiently. Frequent, perhaps even annual, bid rounds are now a possibility because of this steady turnover of available land.
International peers are taking note of Nigeria’s regulatory overhaul. A delegation from Sierra Leone visited Abuja this week to study the NUPRC’s governance framework and seek bilateral cooperation. Foday Mansaray, Director-General of Sierra Leone’s Petroleum Directorate, proposed a formal memorandum of understanding for capacity building. As smaller African nations look to develop their own hydrocarbon sectors, Nigeria’s “big brother” status depends on the success of these reforms.
The current bid round is scheduled to conclude in July 2026 following the commercial bid conference. President Bola Tinubu approved the exercise in late 2025 to reverse a trend of declining upstream investment. While the global energy transition puts pressure on fossil fuels, Nigeria remains focused on sustaining its crude production growth. The successful allocation of these 50 blocks will be a litmus test for the country’s reformed oil sector.