The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has recovered over 50 fallow oil fields from licence holders who failed to meet their development obligations. This move is part of the commission's "drill-or-drop" policy, aimed at ensuring that licence holders develop their allocated fields or risk losing them. The recovered fields have been offered in licensing rounds to investors capable of developing them.
According to Olaide Shaw, NUPRC's director of Acreage Management, the fields were recovered about two years ago under the Petroleum Industry Act's provisions on acreage management. Shaw emphasized that companies holding acreage must either deliver on their committed work programmes or give the blocks up. The commission is committed to preventing acreage warehousing, where licence holders hold onto blocks without resources or work plans.
Shaw described a working acreage as one with seismic activity, drilling preparation, procurement, and signed drilling contracts. The commission now processes approvals fully digitally and is working with multi-client data firms like TGS to make data available, enabling investors to mature projects faster. This move aims to increase efficiency and transparency in the licensing process.
Tony Attah, chief executive of Renaissance Energy, outlined the company's plans to increase oil production. The company currently produces about 265,000 barrels of oil per day and aims to raise that to about 500,000 barrels per day. Attah also emphasized the importance of domestic gas supply, targeting 1 billion cubic feet of gas per day to the domestic market by increasing current supply almost five times.
Ademola Adeyemi-Bero, chief executive of First E&P and Nigeria's OPEC governor, highlighted the country's investment cycle, which could bring in about $100bn. He stressed that spending must benefit Nigerian contractors, service firms, communities, and workers, not just foreign firms. Adeyemi-Bero urged banks to provide better access to capital for oilfield service companies.
Adeyemi-Bero cautioned against awarding acreage to investors who cannot fund their commitments, noting that exploration wells are hard to finance with debt. He assured that Nigeria will get the OPEC quota it requests next year and emphasized the need to focus on building a project pipeline to achieve the 3 million bpd production target for 2030.
The Bonga Southwest project is expected to produce 180,000 bpd, and the country would need roughly eight such projects to meet its production target. NUPRC's executive commissioner, Development and Production, Enorense Amad, and other stakeholders are working together to implement the necessary reforms and attract investments to the upstream sector.
Key points
- NUPRC recovers 50 oil fields from defaulting licencees
- Commission enforces "drill-or-drop" policy under Petroleum Industry Act
- Nigeria targets 3 million bpd production by 2030 with $100bn investment cycle