The Nigerian Upstream Petroleum and Regulatory Commission (NUPRC) has announced the Federal Government’s intention to revoke oil exploration leases granted to companies that have not conducted any exploration activities.
Gbenga Komolafe, the Chief Executive Officer of NUPRC, stated that the revocation would be based on the provisions of the Petroleum Industry Act (PIA) and emphasized that only technically and financially viable companies would retain their leases.
“Based on PIA, the commission is focused on delivering value for the nation, so only firms that are technically and financially viable will keep their leases,” said Komolafe.
He further explained that the commission would initiate reviews of the unused leases, and the awarding of new leases would be subject to specific terms and conditions.
Recent data from NUPRC indicates that out of the 53 exploration leases issued between 2003 and the present, over 60 percent have expired. Of the 33 expired leases, some are held in contractual disputes, and the regulator is no longer willing to allow companies to indefinitely hold onto leases.
The Petroleum Industry Act, enacted in 2021, empowers the regulator to review the technical and financial capabilities of companies holding oil exploration leases. The move aims to streamline the sector, ensuring that only companies with the capacity to explore and contribute to the nation’s value are granted leases.
In recent years, the oil and gas sector in Nigeria has faced challenges, including low investments in exploration activities, insecurity, sabotage of oil infrastructure, and legal disputes with communities in the Niger Delta. These factors have contributed to the decline in oil exploration and production, prompting the government to take measures to revitalize the industry.
