The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has cautioned companies recently awarded Petroleum Prospecting Licences (PPLs) to begin developing their oil and gas assets or risk losing the licences under the “drill or drop” provision of the Petroleum Industry Act (PIA).
Speaking during the licence signing ceremony for successful bidders in the 2022/2023 Mini Bid Round and the 2024 Licensing Round in Abuja on Friday, NUPRC Chief Executive, Oritsemeyiwa Eyesan, urged the licence holders to carry out their approved work programmes and meet all financial and legal obligations.
She emphasized that operators must fulfill their financial commitments, comply with the provisions of the Petroleum Industry Act and other applicable regulations, while maintaining high standards of health, safety, and environmental protection.
Eyesan also stressed the importance of maintaining positive relationships with host communities by establishing Host Community Development Trusts (HCDTs) as required by law, warning that failure to do so could have consequences for their licences.
According to her, the newly awarded licences are expected to boost exploration activities, attract new investments, accelerate the development of Nigeria’s hydrocarbon resources, and strengthen the country’s energy security while supporting economic growth.
She noted that these efforts align with the Federal Government’s target of increasing crude oil production to two million barrels per day by 2027 and three million barrels per day by 2030.
Also speaking at the event, NUPRC Executive Commissioner for Development and Production, Enorense Amadasu, said the Commission has introduced faster approval processes for permits to improve the ease of doing business. He assured the licence holders of the Commission’s support in helping them fulfill their commitments.
Amadasu encouraged the companies to strictly follow their approved work programmes to ensure successful project execution.
Meanwhile, the Commission’s Secretary and Legal Adviser, Olayemi Adeboyejo, repeated the warning that undeveloped assets could be forfeited under the “drill or drop” rule. She also advised the companies to establish their Host Community Development Trusts without delay and encouraged the use of alternative dispute resolution instead of litigation to resolve disagreements with regulators and stakeholders.
