NUPRC Tasks New Oil Licence Holders to Deliver 250,000 Barrels Per Day

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has challenged the 22 new holders of Petroleum Prospecting Licences (PPLs) awarded under the 2022/2023 and 2024 licensing rounds to contribute at least 250,000 barrels of crude oil per day to Nigeria’s national production within the next five years.

The commission also warned that oil and gas licences held by operators who fail to commence exploration and development activities within the stipulated periods risk revocation, as it moves to enforce the drill-or-drop provisions of the Petroleum Industry Act (PIA) 2021.

The Chief Executive of NUPRC, Mrs Oritsemeyiwa Eyesan, announced the production target in Lagos during a two-day onboarding workshop organised for the new licence holders.

The workshop, themed “From Award to Production: Delivering Nigeria’s Upstream Potential Under the Petroleum Industry Act, 2021,” was designed to familiarise the awardees with regulatory requirements, operational expectations and the processes required to translate their licences into actual oil production.

Eyesan said the commission expected the new operators to make a measurable contribution to the country’s oil output, stressing that the award of petroleum licences must lead to tangible investment, exploration and production rather than remain an administrative achievement.

“For this set of awardees, we are expecting nothing less than 250,000 barrels per day in the next five years at least from the 22 awards,” she said.

She added that Nigeria remained on course to achieve a national crude oil production target of three million barrels per day by 2030.

The target places significant responsibility on the new licence holders to mobilise the capital, technical expertise and operational capacity required to discover commercially viable reserves, develop oilfields and bring them into production within the expected timeframe.

Eyesan explained that the commission introduced the onboarding programme to provide guidance to the awardees and help them understand the requirements for moving from licence acquisition to exploration and eventual production.

She advised the new operators to learn from the experiences of previous licence holders, including the successes and mistakes recorded during earlier licensing rounds.

According to her, understanding the challenges that affected previous operators would help the new awardees avoid unnecessary delays and improve their chances of achieving early production.

The commission's position reflects a broader effort to ensure that petroleum assets allocated to investors contribute to national economic development, government revenue and energy security.

NUPRC Sets Timeline For First Oil

As part of its expectations, the NUPRC chief said the commission wanted more than half of the new awardees to achieve first oil within the next two years.

She further expressed the expectation that the operators would progress to drilling their second wells within three to four years.

“We want to see that in the next two years, more than half of you have reached the first oil. In the next three to four years, you are drilling your second well,” Eyesan said.

Achieving these milestones would require the licence holders to move quickly from preliminary assessments and exploration planning to field activities, including geological and geophysical studies, drilling, appraisal and the development of commercially viable discoveries.

However, the speed of progress will depend on several factors, including access to financing, the quality of available geological data, infrastructure, security, regulatory approvals and the commercial viability of the relevant oil and gas assets.

The production target also underscores the importance of sustained investment in Nigeria's upstream petroleum industry at a time when the country is seeking to increase output, strengthen foreign exchange earnings and improve public revenue.

Higher crude oil production could provide additional resources for the federation, support economic activity and create opportunities for Nigerian service companies and other businesses operating within the petroleum value chain.

Nevertheless, the extent of the contribution will depend on whether the new licence holders can secure funding, complete exploration programmes and develop discoveries into producing fields within the prescribed periods.

Idle Licences Face Revocation

In a strong warning to operators sitting on undeveloped petroleum assets, Eyesan reiterated that the commission would enforce the October 31, 2026 deadline for revoking licences where holders had failed to undertake the required activities within the stipulated time.

She said the commission had issued a directive to recover blocks from licence holders who had not fulfilled their obligations within the applicable exploration periods.

“For those who were awarded licences and have not done anything within the stipulated time – three years for those onshore and five years for those offshore – the Commission will call in those blocks,” she said.

The commission intends to apply the drill-or-drop principle, under which licence holders are expected either to undertake the required exploration activities or relinquish the relevant petroleum assets in accordance with applicable regulatory provisions.

Eyesan said the approach was consistent with international industry practice, citing the United Kingdom and the Netherlands as examples of jurisdictions where operators are expected to fulfil their licensing obligations.

She also made it clear that extensions would no longer be granted automatically, signalling a tougher approach towards licence holders who fail to demonstrate meaningful progress.

The enforcement drive is intended to discourage speculative acquisition of petroleum assets and encourage operators to commit resources to exploration and development.

Under such an approach, the government can seek to make dormant blocks available to investors who have the financial and technical capacity to develop them, potentially accelerating the discovery and production of additional petroleum resources.

However, the effectiveness of the policy will depend on consistent enforcement, transparent procedures and the commission's ability to distinguish between operators who have failed to act and those facing legitimate technical, financial or operational constraints despite demonstrable progress.

Challenge Of Translating Licences Into Production

Nigeria's ambition to raise crude oil output to three million barrels per day by 2030 will require more than the allocation of additional petroleum licences.

The country must also address the practical challenges involved in converting prospective resources into commercially producing assets. These include attracting long-term investment, securing exploration and development financing, providing reliable infrastructure and maintaining a stable regulatory environment.

For the 22 new awardees, the immediate task will be to establish clear development plans, meet their financial commitments and demonstrate that their respective assets can support commercially viable production.

Exploration and field development are capital-intensive activities, and not every prospect will result in a commercially recoverable discovery. Operators must therefore combine technical competence with prudent investment decisions and compliance with regulatory requirements.

The NUPRC's emphasis on early production is also likely to place pressure on operators to establish realistic project schedules and maintain regular engagement with regulators.

At the same time, the commission will need to provide the guidance and regulatory clarity necessary for legitimate investors to proceed without avoidable delays.

The onboarding workshop therefore represents an attempt to align the expectations of the regulator and the new licence holders from the beginning of their operations.

Production Target And National Oil Ambition

The expectation that the 22 new awardees will collectively contribute at least 250,000 barrels per day within five years represents a substantial production target.

Meeting it would require the operators to make significant progress across their respective assets, although the actual contribution of each licence will depend on the size, geological characteristics and commercial potential of the relevant fields.

The target also forms part of the wider challenge of increasing Nigeria's oil production towards the three-million-barrel-per-day ambition set for 2030.

For an oil-dependent economy, higher production can strengthen export earnings and government receipts, provided that additional output is sustained and marketed effectively. It can also support investment in oilfield services, logistics, engineering and other supporting industries.

However, the benefits will not arise from licence awards alone. They will depend on actual production, efficient operations, responsible management of petroleum resources and the extent to which increased activity generates employment and domestic economic value.

By warning inactive licence holders of possible revocation while setting clear expectations for new awardees, the NUPRC is seeking to reinforce the principle that access to petroleum resources must be matched by performance.

The coming years will show whether the 22 new operators can meet the commission's production expectations and whether the regulator can translate its enforcement policy into measurable gains for Nigeria's upstream petroleum industry.