By Juliet Ezeh
Nigeria’s oil regulator has declared an end to the long-standing practice where companies held oil exploration licences for years without developing them, warning that operators must now either commence drilling or surrender their assets.
The directive follows the enforcement of a “drill or drop” provision introduced under the Petroleum Industry Act (PIA), which requires licence holders to actively develop their fields within a specified timeframe or relinquish them to the government.
The Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemeyiwa Eyesan, said the reform has fundamentally changed how exploration licences are managed in the country.
Speaking during a meeting with a delegation from Sierra Leone’s Petroleum Directorate in Abuja, Eyesan said the era of asset hoarding had slowed Nigeria’s exploration activities and prevented the full development of its hydrocarbon resources.
According to her, the PIA has corrected the problem by forcing operators to either move forward with exploration work or give up their licences so other investors can take over.
Companies Limited to Two Oil Blocks
The policy shift is also reflected in the ongoing 2025 oil licensing round, where the regulator has placed restrictions on how many assets companies can acquire.
Eyesan revealed that a total of 50 oil blocks are currently being offered in the bid round, but each company is limited to a maximum of two blocks, whether bidding independently or through a consortium.
She said the restriction was deliberately introduced to ensure broader participation among investors and prevent companies from accumulating multiple undeveloped assets.
Investor Interest Remains Strong
Despite the stricter conditions, the regulator said investor response to the licensing round has been encouraging.
Eyesan noted that the number of applicants during the pre-qualification stage indicates renewed confidence in Nigeria’s upstream petroleum sector following regulatory reforms.
To further strengthen credibility, the commission also engaged an independent audit firm to review the digital bidding platform used for the exercise.
According to the regulator, the audit is intended to validate the integrity of the bidding system and reassure investors about transparency in the licensing process.
More Oil Blocks Returning to Government
Eyesan explained that the enforcement of the “drill or drop” rule has already begun to return dormant oil assets to the government’s portfolio.
In the past, she said some operators held prospecting licences for as long as 20 years without carrying out meaningful exploration, limiting Nigeria’s ability to expand its petroleum reserves.
With the new framework in place, unused assets are expected to be redistributed through more frequent licensing rounds.
Nigeria Targets Higher Reserves
The government hopes the policy will accelerate exploration activities and support Nigeria’s long-term goal of increasing proven crude oil reserves.
The current licensing round—approved by Bola Tinubu—covers oil and gas blocks across major sedimentary basins including the Niger Delta, Anambra, Bida, Benue Trough and Chad basins.
Officials say the process, which began in late 2025, is expected to conclude in July 2026 after the technical and commercial bid evaluations.
Regional Collaboration
Meanwhile, Sierra Leone’s petroleum authorities have expressed interest in learning from Nigeria’s regulatory reforms.
The Director-General of the country’s Petroleum Directorate, Foday Mansaray, said the visit to the Nigerian regulator was aimed at deepening cooperation and gaining insights into managing a modern petroleum sector.
He added that Sierra Leone hopes to strengthen collaboration with Nigeria through a future agreement on regulatory capacity building and energy sector development.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.