Nigeria has shortened the approval period for reactivating dormant oil wells.
Eniola Akinkuotu, spokesperson for the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), informed TheCable that the commission is expediting processes and “reducing timeframes for issuing permits,” including permits for the reactivation of oil wells.
“We are speeding up processes and reducing timelines for permit issuance. Each permit has its distinct timeline,” he said.
The move is reportedly intended to enable the country to take advantage of elevated energy prices.
According to a Bloomberg report released on Wednesday, the NUPRC is currently issuing permits within hours of receiving applications, based on information from sources with knowledge of the process who asked not to be identified.
“With oil trading near $100 a barrel, Africa’s top producers are moving to capitalize on demand as buyers turn to suppliers such as Nigeria and Angola, away from the Middle East conflict,” the report reads.
“The West African nation has also fast-tracked approvals for evacuations and barges at production facilities and export terminals.”
A spokesperson at the regulator said “speedy approvals” were being given “for all activities that could increase production”.
Bloomberg reported that the recent increase in applications has primarily been attributed to local oil companies seeking to resume operations at previously inactive wells, observing that the regulator is facilitating this activity by reducing an approval process that previously required between two and six weeks.
Reactivating older or inactive wells for production is reported to be more economical than drilling new wells, which can require years of planning, with crude oil from new wells typically taking approximately four weeks to reach the surface after drilling begins.
“Nigeria’s production fell to 1.31 million barrels per day in February, the lowest level in 17 months, largely due to maintenance work at a 225,000 barrels a day production facility operated by Shell Plc,” the publication said.
“Output has yet to recover to peaks above 2 million barrels a day, limiting the country’s ability to capitalize on rising crude prices relative to its peers.
“The OPEC member averaged 1.34 million barrels a day in 2022, when oil surged to as much as $130 a barrel following Russia’s invasion of Ukraine.”
The regulator reportedly approved 500 permits in 2024 to reopen old wells, including permits for Heirs Energy and Seplat Energy Plc.
On April 1, Heineken Lokpobiri, minister of state for petroleum resources, stated that the federal government intended to begin implementing the drill-or-drop provisions of the Petroleum Industry Act (PIA).
What This Means – The faster permitting process positions Nigeria to potentially increase output and earn more from current oil prices, but production still remains well below its two-million-barrel-per-day peak. How much the country actually benefits will depend on whether the reactivation of idle wells can deliver meaningful volume gains and how quickly the sector addresses the infrastructure and maintenance issues that have kept output constrained.
