Federal Government to Revoke Inactive Oil Licences Under New ‘Drill or Drop’ Policy

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced its readiness to enforce the ‘drill or drop’ policy targeting dormant oil licences.

Gbenga Komolafe, Chief Executive of the NUPRC, revealed this during a recent meeting with a delegation from the Independent Petroleum Producers Group (IPPG) at the commission’s headquarters in Abuja.

According to a statement issued by the commission, Komolafe stressed that oil and gas operators must either commence production within a defined timeframe or forfeit their licences. He explained that the initiative is designed to rejuvenate Nigeria’s oil sector, optimise asset usage, and increase government revenue.

“Komolafe also discussed the implementation of the ‘drill or drop’ policy, which requires operators to either begin production within a specified timeframe or relinquish their licenses. This policy aims to revitalise the oil sector, ensure optimal use of assets, and boost government revenue,” the NUPRC chief executive was quoted.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has consistently pledged that the ‘drill or drop’ policy will be enforced. He stated that the government would reclaim idle oil wells from operators who fail to utilise them.

At the meeting, Komolafe welcomed the visiting delegation and reaffirmed the commission’s commitment to maintaining a favourable business climate for industry stakeholders. He highlighted major policy reforms introduced since the passage of the Petroleum Industry Act, including the automation of key regulatory procedures such as licensing and permit issuance. 

These reforms, he said, have helped reduce red tape and improved efficiency within the sector.

The IPPG delegation was led by its Chairman, Mr. Abdulrazaq Isa, who is also the Chairman of Waltersmith Group, a prominent indigenous oil and gas company.

“The visit was a strategic engagement aimed at strengthening collaboration between the commission and indigenous producers. It also served as an opportunity for the IPPG to formally express its appreciation to the NUPRC for the critical role it played in facilitating the recent divestment of assets by international oil companies.

 These divestments, which were closely overseen by the commission, have enabled a significant transfer of upstream oil and gas assets to indigenous operators. This transition marks a pivotal shift in Nigeria’s energy landscape, creating new opportunities for local companies to scale up operations,” it was stated.

During the engagement, IPPG reaffirmed its support for the commission’s ‘Project One Million Barrels Incremental’ initiative, which is focused on increasing the nation’s daily crude oil output. The group also underlined its dedication to both oil and gas development as part of its long-term strategy.