The Federal Government has unveiled a strict enforcement of its long-standing ‘drill or drop’ policy, which mandates oil producers to either commence production within a defined period or forfeit their operational licences.
This strategic policy shift was confirmed by the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, during a recent high-level meeting with members of the Independent Petroleum Producers Group (IPPG) in Abuja.
According to a statement by the commission, Komolafe reiterated the government’s resolve to ensure optimal utilisation of petroleum assets, particularly in the face of dwindling production volumes and increasing pressure to boost national revenue. “The drill-or-drop policy is a deliberate regulatory strategy aimed at eliminating licence speculation, stimulating investment, and unlocking value from dormant fields,” Komolafe stated.
The NUPRC chief noted that the new framework aligns with the goals of the Petroleum Industry Act (PIA), which provides the legal basis for a transparent and investment-friendly energy sector. He added that the commission is actively streamlining its procedures to ensure swift licence issuance, divestment approvals, and regulatory compliance by operators.
The ‘drill or drop’ mechanism is expected to target oil firms—particularly those holding marginal fields or licences acquired but left undeveloped for years. These licences, if not activated, will now be subject to revocation and reallocation to more capable indigenous or international operators.
This policy comes amid consistent underperformance in Nigeria’s crude production. The country has repeatedly failed to meet the Organization of the Petroleum Exporting Countries (OPEC) quota of 1.5 million barrels per day and remains well below its ambition to ramp production to 2 million barrels per day by 2027.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, had earlier declared the government’s intent to reclaim idle assets, stressing that non-performing operators would be replaced. “No more hoarding of oil blocks. We need activity, investment, and output,” Lokpobiri warned at an industry forum earlier this year.
Meanwhile, the IPPG, represented by its Chairman and Waltersmith Group boss, Abdulrazaq Isa, expressed full support for the policy. Isa commended NUPRC for fostering transparency and engagement, particularly in the recent asset divestments by International Oil Companies (IOCs). He noted that such divestments have created a more indigenous-driven upstream sector and could serve as a catalyst for job creation and capital inflow.
The meeting also saw renewed commitment to the Commission’s ‘Project One Million Barrels Incremental’—a programme designed to raise Nigeria’s daily production by an additional one million barrels. The IPPG assured that its member companies are aligning their operations and investment pipelines to meet the target.
As part of broader sectoral reforms, the NUPRC revealed that it has digitalised licensing and permitting procedures, drastically reducing red tape and improving service delivery.
Energy analysts say the strict enforcement of the ‘drill or drop’ policy could signal a turnaround for Nigeria’s struggling oil sector, provided it is implemented transparently and coupled with measures to de-risk the investment climate.
However, concerns remain over the ability of indigenous firms to scale operations quickly, especially in an era of energy transition and capital flight from fossil fuels. There is also the issue of security, especially in the Niger Delta region, where oil infrastructure remains vulnerable to vandalism and theft.
Still, the latest policy is widely viewed as a bold step towards holding stakeholders accountable and revamping an industry critical to Nigeria’s economic survival.