PIA’s Drill-or-Drop Rule Ends Two Decades of Licence Squatting, Opens Door to Annual Bid Rounds
Abuja: The Nigerian Upstream Petroleum Regulatory Commission has declared an end to the era of companies holding oil prospecting licences without developing their assets.
The Commission’s Chief Executive, Mrs Oritsemeyiwa Eyesan, said this when she received the management of the Petroleum Directorate of Sierra Leone at the Commission’s headquarters in Abuja.
Eyesan, in a statement on Friday, said one of the beauties of the Petroleum Industry Act (PIA) was Section 94, which compelled operators to either commence work or relinquish the license, a provision commonly referred to as Drill or Drop.
She said that the enforcement of the provision had now attracted more serious investors in the ongoing 2025 licensing rounds, which would increase Nigeria’s petroleum reserves.
“The PIA also creates opportunities for both small and large operators because of the drill-or-drop mandate. We have eliminated previous uncertainties.
“So, in the past, we had operators who had 20-year licenses and sat on these blocks and did absolutely nothing.
“Now, we have moved from that era to drill or drop. So, now we have more assets in the basket, which has given us the impetus to go for, if possible, annual bid rounds,” she said.
She also welcomed the surge in applicants for the 2025 licensing round.
“The numbers are impressive since the licensing round guidelines limit companies—whether acting independently or in consortia—to bidding for no more than two of the 50 oil blocks offered.
“For the 2025 licensing round, we have 50 oil blocks on offer. And the outcome of the pre-qualification submission was a demonstration that there is indeed a very good appetite for the bid round,” he said.
Eyesan stated that to ensure transparency in the licensing round, NUPRC has introduced an additional validation layer by collaborating with a respected audit firm to evaluate and confirm the process.
“The result of that exercise will be made public just to boost investor confidence,” she said.
In his remarks, the Director-General of the Petroleum Directorate of Sierra Leone, Mr Foday Mansaray, said the aim of the meeting was to understand Nigeria’s petroleum sector and to use the lessons to improve his country’s hydrocarbon sector.
Mansaray called for stronger, more sustainable energy collaboration between Sierra Leone and Nigeria.
“We are here to collaborate with the NUPRC at a bilateral level and learn from Nigeria, our big brothers in the industry.
“We are a small country of just eight million people, but very ambitious,” he said, while seeking the signing of a Memorandum of Understanding (MoU).
