The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has signaled a definitive shift in the nation's upstream petroleum governance, announcing that the practice of companies acquiring and simply holding onto prospecting licenses without conducting any development activities has officially ended. The declaration was made by Commission Chief Executive Mrs. Oritsemeyiwa Eyesan during a visit by the Petroleum Directorate of Sierra-Leone to the NUPRC headquarters in Abuja.
Eyesan identified Section 94 of the Petroleum Industry Act as the cornerstone of this transformation, describing it as one of the most significant provisions in the legislation. The section mandates that license holders must either initiate work programs on their blocks or surrender the acreage—a mechanism commonly known in the industry as drill-or-drop.
According to Eyesan, the enforcement of this provision has fundamentally altered the investment landscape. "In the past we had operators who had 20-year licenses and sat on these blocks and did absolutely nothing," she stated, contrasting that era with the current regime. The NUPRC boss emphasized that this shift has cured longstanding problems of regulatory uncertainty and created a more attractive environment for genuine investors.
The results of this enforcement approach are already evident in the ongoing 2025 licensing round, which has drawn substantial interest from market participants. Eyesan reported that the number of pre-qualification submissions received was "quite impressive," particularly given the constraints built into the licensing guidelines. Under the current framework, no single company—whether operating independently or as part of a consortium—may submit bids for more than two of the 50 oil blocks available in the offering.
The NUPRC has also implemented additional safeguards to reinforce confidence in the licensing process. To ensure complete transparency, the Commission has engaged a reputable external audit firm to validate and interrogate the bid evaluation system. Eyesan indicated that the findings from this independent review would be made publicly available to further bolster investor assurance.
The enforcement of drill-or-drop provisions has effectively expanded the inventory of available acreage, according to Eyesan. With more assets entering the licensing basket, the Commission is now positioned to consider conducting annual bid rounds rather than the irregular cycles that characterized previous years.
The Sierra-Leone delegation, led by Director-General Foday Mansaray of the Petroleum Directorate, visited the NUPRC to study Nigeria's petroleum regulatory framework and apply those lessons to their own national hydrocarbon sector development efforts.