FG to reclaim undeveloped oil blocks from October 31

The Federal Government will begin reclaiming undeveloped oil and gas blocks from October 31, 2026, as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) moves to enforce the “drill or drop” policy against licence holders who fail to develop their assets.

NUPRC Chief Executive, Oritsemeyiwa Eyesan, restated the deadline during an onboarding programme for new holders of petroleum licences, warning that undeveloped acreage would be relinquished to the Federation and made available for reassignment to operators willing to develop it.

The policy is anchored in Section 94 of the Petroleum Industry Act (PIA) 2021, which provides the legal basis for enforcing work obligations and recovering acreage that licence holders fail to develop within the prescribed timeframe.

Before the legislation, oil block allocations were largely discretionary, according to the NUPRC. The commission said this contributed to a situation in which some companies obtained licences without the technical or commercial capacity to develop the assets.

Since its establishment in 2021, the regulator has moved to address the problem by recovering non-performing fields and making them available to new operators. More than 50 fallow fields have already been revoked and returned to the pool for reassignment, according to information published by the commission.

The latest enforcement drive is accompanied by an onboarding programme designed to help new licence holders avoid the failures of previous operators and move their assets towards exploration and production.

Among the companies awarded licences are TotalEnergies, which secured Petroleum Prospecting Licences (PPLs) 2000 and 2001; Sahara Energy, awarded PPLs 270 and 271; First E&P, which received PPLs 2003 and 2006; and MRS, awarded PPL 303.

The programme involves about 22 companies, including established industry operators and new entrants, according to the NUPRC.

The commission said the onboarding initiative would provide the new licensees with technical guidance from its subject matter experts and experienced industry professionals on developing their oil and gas assets within the shortest possible time.

Beyond enforcing compliance, the regulator is seeking to accelerate the transition from exploration to production. Its stated objective is for the new licence holders to progress from exploration within 18 months and collectively contribute an additional 250,000 barrels per day to Nigeria’s crude oil production within five years.

Achieving that target would increase national crude supply, create employment opportunities and expand government revenue from the petroleum sector.

The NUPRC said the onboarding programme was continuing, with experts and industry veterans scheduled to discuss strategies for developing the newly awarded assets.

Under the commission’s stated position, operators that fail to meet their development obligations by the October 31 deadline risk losing their undeveloped acreage, which could then be reassigned to companies prepared to put the assets into production.