The Nigerian Upstream Petroleum and Regulatory Commission (NUPRC) is contemplating the revocation of over 60% of dormant oil exploration leases. Most of the affected exploration leases, dates as far back as 2003, granted to both local and foreign oil firms.
CEO of NUPRC, Gbenga Komolafe, emphasized the regulatory shift, stating, “Based on PIA (Petroleum Industry Act), the commission is focused on delivering value for the nation, so only firms that are technically and financially viable will keep their leases.”
The latest data from NUPRC revealed that 33 exploration leases have expired, with four entangled in contract disputes. While the leases have not been automatically revoked, the regulator is abandoning the practice of allowing indefinite holding.
Nigeria, Africa’s largest oil producer, has grappled with declining production due to crude theft, pipeline vandalism, and a scarcity of new investments. The Petroleum Industry Act, enacted in 2021, empowers the regulator to assess the technical and financial capacities of companies holding oil exploration leases.
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Komolafe affirmed that the commission will conduct thorough reviews, and the awarding of new leases will be “subject to specific terms and conditions.” Notable companies like Oando and TotalEnergies find their expired leases under scrutiny, intensifying the impact of this regulatory shake-up.