UPSTREAM PETROLEUM OPERATION ORDER

What Is This Policy?

The Upstream Petroleum Operations Order encompasses the suite of regulatory instruments issued by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) under the Petroleum Industry Act 2021, governing exploration, development, production, measurement, reporting, decommissioning, and environmental compliance for all upstream oil and gas operations in Nigeria.

Who Does It Target?

International oil companies (IOCs): Shell, TotalEnergies, ExxonMobil, Chevron, Eni, and other concession holders Indigenous upstream operators: Seplat, Oando, Eroton, First E&P, and other Nigerian oil and gas producers Service companies, drilling contractors, pipeline operators, and terminal operators in the upstream sector New entrants seeking exploration licences, prospecting licences, or petroleum mining leases (PMLs) under the PIA framework

What Does It Aim to Achieve?

Provide a clear, transparent, and commercially competitive regulatory framework for all upstream oil and gas activities in Nigeria Ensure full compliance with the fiscal terms, production obligations, gas flare-out targets, and environmental standards of the PIA 2021 Accelerate the transition from Joint Ventures (JVs) and Production Sharing Contracts (PSCs) to the new Petroleum Mining Lease (PML) framework under PIA Drive domestic gas supply obligations: all upstream operators are required to supply a defined portion of their gas production to the domestic market

Key Features

NUPRC as Technical Regulator: The Nigerian Upstream Petroleum Regulatory Commission replaces DPR as the sole technical and commercial regulator for all upstream petroleum activities in Nigeria Licence Regime: PIA introduces Petroleum Exploration Licences (PELs), Petroleum Prospecting Licences (PPLs), and Petroleum Mining Leases (PMLs) to replace the old OPL/OML framework Gas Flare-Out Timeline: All upstream operators must achieve zero routine gas flaring by 2030; gas flaring penalties are payable to the Federation Account under the executive order of 2026 Domestic Gas Supply: All upstream operators must meet gas supply obligations to the domestic market; failure to supply results in penalties under the Midstream and Downstream Gas Regulatory Authority Host Community Trust Fund: Operators must establish a Host Community Development Trust, contributing 3% of annual gross revenue for the prior year to develop oil-producing communities Environmental Decommissioning: Operators must submit decommissioning plans and fund decommissioning and abandonment reserves throughout the producing life of their assets

Current Status

Rollout Stage: Active; NUPRC has issued multiple operational guidelines, reporting formats, and compliance schedules since 2022; full PIA transition ongoing Implementing Body: Nigerian Upstream Petroleum Regulatory Commission (NUPRC); Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for cross-sector issues IOC Divestments: Several IOCs have divested onshore assets to indigenous operators since 2021; NUPRC oversees the regulatory transfer and production continuity obligations Revenue Reform: Executive Order 9 (February 2026) redirects all upstream production revenues directly to the Federation Account; NUPRC coordinates measurement and verification

How to Access

Operators: Download NUPRC operational guidelines, licence application forms, and compliance schedules at nuprc.gov.ng New Entrants: Apply for Petroleum Exploration Licences (PEL) or bid in NUPRC's licence round auctions: nuprc.gov.ng/licensing Service Companies: Register with NUPRC's Upstream Service Provider Database to be considered for operator procurement under Nigerian Content rules Contact: NUPRC: nuprc.gov.ng | 7 Kofo Abayomi Street, Victoria Island, Lagos | +234 (0) 1 460 3700

Official Resources

Website: nuprc.gov.ng Contact: NUPRC, 7 Kofo Abayomi Street, Victoria Island, Lagos | [email protected] | +234 (0)1 460 3700 Policy Summary | Source: NUPRC, PIA 2021, Punch Nigeria, Businessday, KPMG Nigeria PIA Analysis, NNPCL | February 2026

Legal Framework

Issued under the regulatory powers of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) established by the Petroleum Industry Act (PIA) 2021, which is the principal statute replacing the Petroleum Act (Cap P10 LFN 2004). Operates alongside the Deep Offshore and Inland Basin Production Sharing Contracts (Amendment) Act 2019, the Petroleum Profits Tax Act (as amended by PIA), and international petroleum industry standards. The NUPRC Regulations provide detailed operational rules.