The Commission Chief Executive, Oritsemeyiwa Eyesan, issued the warning as the regulator moves to enforce the “Drill-or-Drop” provisions of the Petroleum Industry Act (PIA) 2021. The policy is intended to prevent companies from retaining petroleum assets without carrying out the work required under their licences.

Speaking at the Harvard Business School Association of Nigeria (HBSAN) energy conference in Lagos on Friday, October 9, Eyesan said operators were expected to understand the nature of the assets they acquired and present clear plans for developing their oil and gas resources.

She warned that the commission would take action against companies that ignored their obligations, adding that operators holding onshore assets must also comply with the applicable development timelines.

Under the directive, the October 31 deadline applies to holders of Petroleum Prospecting Licences awarded through the 2020 Marginal Field Bid Round, the 2022/2023 Mini Bid Round and the 2024 Licensing Round whose approved work programmes are not being fulfilled.

In a circular dated September 14, 2026, and referenced NUPRC/1127/Vol.13/55, the commission directed affected companies to report the level of progress made on their approved work programmes, explain the specific challenges affecting implementation and outline measures for overcoming those obstacles. Operators must also provide revised timelines for completing outstanding work.

The regulator cited provisions of the Petroleum Industry Act governing licence obligations, defaults and revocation as the legal basis for the enforcement exercise. Potential consequences for non-compliant operators include refusal of licence extensions, relinquishment of affected acreages, recovery of work performance securities and the commencement of licence revocation proceedings.

The commission explained that petroleum prospecting licences are granted for defined periods and carry conditions that operators must fulfil before they can continue holding the assets. These obligations include commitments set out in licence documents, general licence conditions, concession contracts, minimum work programmes and work performance securities.

According to the regulator, companies cannot retain petroleum acreages indefinitely without undertaking the required activities. Assets that remain undeveloped within the applicable licence terms may be returned to the Federal Government.

However, the NUPRC said its primary objective was to increase oil and gas production rather than simply revoke licences. It acknowledged that some operators could be struggling with legitimate operational difficulties and encouraged them to disclose such problems before the deadline.

The challenges identified by the commission include funding shortages, limited access to drilling rigs, insecurity, difficulties engaging host communities, infrastructure gaps, regulatory approval delays and disagreements among business partners.

Affected companies are expected to explain how these issues have affected their work programmes and propose practical steps for resolving them. The commission, however, cautioned that notifying the regulator or entering discussions would not automatically extend a licence or remove the operator’s legal responsibilities.

It also stressed that disputes among partners would not, by themselves, excuse a company from complying with its licence conditions.

The directive forms part of the regulator’s broader effort to ensure that petroleum assets awarded through licensing exercises are actively developed and contribute to Nigeria’s production capacity. The commission has asked operators seeking clarification to contact its Executive Commissioner for Exploration and Acreage Management, Bashari Indabawa.

Meanwhile, HBSAN President Collins Onuegbu used the conference to call for stronger coordination across Nigeria’s oil, gas and electricity industries, arguing that the country must turn its substantial energy resources into wider economic benefits.

Speaking at the event, themed “One Energy System: Integrating Oil, Gas and Power for National Transformation,” Onuegbu highlighted persistent supply limitations, infrastructure deficiencies and high energy costs facing businesses and households.

He said the conference was designed to develop practical solutions rather than limit discussions to identifying challenges. According to him, the association intends to produce a white paper containing recommendations for the government, regulators, investors and other industry stakeholders.

The proposed document is expected to outline priority actions, identify responsible parties and provide implementation approaches to support a more integrated energy system and improve the contribution of Nigeria’s natural resources to economic growth.

Reporting by TalkNaijaMedia