Nigeria Ends Era of ‘Licence Squatting’ as Regulator Enforces Drill-or-Drop Law
Nigeria’s upstream regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has declared an end to the practice of companies sitting idle on oil licences for decades, as the landmark Petroleum Industry Act’s (PIA) drill-or-drop provision begins to bite.
Speaking at a recent engagement, NUPRC Chief Executive Gbenga Komolafe’s spokesperson confirmed that the era of operators holding licences for up to 20 years without any drilling activity is now firmly over. The enforcement has dramatically expanded the pool of available blocks and enabled more frequent bid rounds, with the NUPRC now eyeing the possibility of annual licensing cycles going forward.
The 2025 licensing round offers a total of 50 oil blocks. In a move designed to broaden participation and prevent concentration of assets, bidding guidelines restrict each company — whether applying independently or as part of a consortium — to a maximum of two blocks.
NUPRC Director General Farouk Ahmed’s team has also introduced an additional layer of transparency by commissioning an independent audit firm to scrutinise and validate the digital bid system, with the outcome of the audit set to be made public to bolster investor confidence.
Interest in the round has been described as impressive, with a strong turnout at the pre-qualification stage. The commission’s moves signal a decisive shift in Nigeria’s management of its hydrocarbon resources, with officials from Sierra Leone’s Petroleum Directorate also travelling to Abuja to study the Nigerian regulatory model as a template for their own sector reforms.
Source: thesun.ng
