NUPRC Warns Oil Firms Over Licence Compliance, Sets October 31 Deadline

The regulator gives affected operators until October 31 to explain delays, demonstrate compliance with approved work programmes and outline corrective measures or risk sanctions.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned oil and gas companies holding undeveloped or underperforming petroleum licences to demonstrate compliance with their contractual and statutory obligations by October 31, 2026, or risk sanctions, including possible licence revocation

The directive targets operators awarded licences under the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round. It requires affected companies to disclose their compliance status, explain delays in executing approved work programmes and submit corrective measures with realistic implementation timelines.

In a circular dated September 14, 2026, and signed by its Chief Executive, Oritsemeyiwa Eyesan, the commission said the exercise was intended to ensure that petroleum acreage was actively developed rather than retained without meaningful exploration or production activity.

The move comes as Nigeria seeks to increase crude oil production, attract investment into the upstream petroleum sector and maximise the economic value of its hydrocarbon resources.

Legal Obligations Under the Petroleum Industry Act

The NUPRC said its enforcement approach was supported by provisions of the Petroleum Industry Act (PIA) 2021, including Sections 77, 78, 88, 96 and 97.

The framework requires licence holders to comply with applicable licence conditions, approved work programmes, minimum work commitments and other relevant statutory obligations.

The commission warned that operators failing to meet their commitments could face refusal of licence extensions, compulsory relinquishment of acreage, calls on work performance securities or revocation proceedings, subject to the applicable legal and licensing requirements.

The warning reinforces the principle that holding a petroleum licence comes with continuing obligations and does not guarantee indefinite control of an asset where required work is not undertaken.

However, the directive does not mean that every delayed project will automatically result in licence cancellation. The circumstances of each operator, the terms of its licence and the applicable legal procedures remain relevant to any enforcement decision.

Operators Asked to Explain Delays

The commission has acknowledged that companies may face challenges involving financing, rig availability, insecurity, host-community engagement, infrastructure, regulatory approvals and disputes among business partners.

Affected operators are expected to document these constraints, explain their impact on project execution and demonstrate the steps being taken to resolve them.

From a compliance standpoint, companies will need to provide reliable evidence of progress against approved work programmes, identify outstanding commitments and submit corrective plans supported by achievable timelines.

The NUPRC has nevertheless warned that engagement with the regulator will not automatically extend licence periods or exempt companies from their obligations. Disputes among business partners will also not, by themselves, excuse non-compliance.

The deadline therefore places pressure on operators to review their licence conditions, outstanding commitments and regulatory reporting records to establish whether corrective action is required.

Implications for Investors and the Oil Industry

The enforcement drive could create opportunities for qualified investors if undeveloped or non-performing acreage is returned to the government and subsequently made available through lawful allocation processes.

It could also strengthen confidence in Nigeria’s licensing system by demonstrating that petroleum assets are awarded subject to enforceable development commitments.

However, licence revocation alone will not guarantee higher production. Exploration and development require substantial capital, technical expertise, infrastructure and time. The effectiveness of the policy will depend on whether assets can be transferred to capable operators willing and able to meet their obligations.

For existing licence holders, the directive highlights the importance of financial planning, project monitoring, internal compliance controls and timely engagement with the regulator. Companies that fail to address compliance gaps could face financial losses, disrupted investment plans and the loss of rights over valuable acreage.

What Happens Next?

The NUPRC will assess submissions from affected operators after the October 31 deadline and determine whether further regulatory action is warranted under the applicable framework.

The commission has maintained that its primary objective is to increase oil and gas production rather than simply revoke licences.

The outcome will test whether Nigeria can enforce petroleum licensing obligations consistently while addressing legitimate operational challenges. For operators, the immediate priority is to demonstrate compliance or provide credible, documented plans for resolving outstanding issues.

Ultimately, the regulator’s success will be measured not by the number of licences revoked, but by whether the enforcement drive translates into greater investment, increased exploration and sustained growth in Nigeria’s petroleum production.