Nigeria's Federal Government will begin revoking idle oil blocks from licence holders who have failed to start development work within stipulated deadlines, the Nigerian Upstream Petroleum Regulatory Commission said this week. The NUPRC chief executive, Oritsemeyiwa Eyesan, announced the mass revocation during a workshop for holders of licences awarded in the 2022/2023 and 2024 licensing rounds in Lagos on Tuesday. She said the commission had issued a directive to recover blocks from operators who had not undertaken activities within the required periods, with enforcement to begin by 31 October.
The revocation will apply to onshore assets where operators have not progressed within three years of receiving their licences, and offshore assets where the deadline is five years, according to Eyesan. She emphasised that this represents standard international practice, comparing Nigeria's approach to policies in the United Kingdom and the Netherlands. Eyesan addressed concerns about whether the threat was genuine, saying the regulator would enforce the directive and that operators should expect consequences for holding assets without development progress.
The move aims to tackle a persistent problem in the upstream sector where some operators secure licences but fail to progress to exploration, development and production. Eyesan explained that some successful bidders assembled technical teams for the licensing process but disbanded them after winning assets, then spent considerable time searching for technical partners or financing. When operators approached the commission for extensions, they cited lack of partners or financing as justification. The NUPRC chief executive said such reasons would no longer be accepted as grounds for extending development timelines, and that extensions would not be granted automatically.
Eyesan urged new licence holders to avoid the mistakes of previous operators by ensuring they possessed the technical, financial and managerial capacity to run their assets before participating in licensing rounds. She noted that owning an oil asset required more than the ability to pay acquisition costs, stressing the business demanded specialised knowledge and proper corporate structures. The commission has reviewed outcomes from previous licensing rounds and divestments by international oil companies, with results varying considerably, she said. Some operators have successfully increased production from previously undeveloped fields while others recorded declining output from acquired assets.
For investors and operators, the policy means that holding idle licences will no longer be a viable strategy, requiring those acquiring petroleum assets to commit resources and expertise immediately upon award. For Nigeria, enforcing development timelines could accelerate upstream activity and unlock value from fields that have remained dormant since previous licensing rounds.