Nigeria has reduced the approval timeline for restarting inactive oil wells.
Eniola Akinkuotu, the Nigerian Upstream Petroleum Regulatory
Commission (NUPRC) spokesperson, disclosed that the authority is
accelerating procedures and “cutting down timelines for issuing permits”,
including those for reactivating 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 aimed at helping the country
capitalise on high energy prices.
According to a Bloomberg report on Wednesday, the NUPRC is
now granting permits within hours of application, citing sources familiar with
the process who requested anonymity.
“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 said the recent spike in applications has largely
been driven by local oil companies looking to return to previously inactive
wells, noting that the regulator is encouraging this activity by shortening an
approval process that used to take between two and six weeks.
Restoring older or inactive wells for production is said to
be more cost-effective than drilling new ones, which can take years of
planning, with any resulting crude typically taking around four weeks to reach
the surface.
“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 had reportedly approved 500 permits in 2024 to
reopen old wells, including those for Heirs Energy and Seplat Energy Plc.
On April 1, Heineken Lokpobiri, minister of state for
petroleum resources, said the federal government planned to commence
implementing the drill-or-drop provisions of the Petroleum Industry Act (PIA).
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