(Bloomberg) – Nigeria has slashed the time it takes to approve applications to revive idle oil wells from weeks to hours as Africa’s top crude producer seeks to take advantage of high energy prices.
The Nigerian Upstream Petroleum Regulatory Commission is approving permits within hours of application, according to people familiar with the process, who asked not to be identified because they aren’t authorized to speak to the media.
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 West African nation has also fast-tracked approvals for evacuations and barges at production facilities and export terminals.
A spokesman at the regulator said “speedy approvals” were being given “for all activities that could increase production.”
The recent surge in applications has come from mostly local oil companies seeking to re-enter old wells. They are being encouraged by the regulator that’s cutting down an approval process that previously took anywhere from two to six weeks.
Repairing older or suspended wells for production is cheaper compared with drilling new wells, which can take years of planning, with any potential crude taking an average of four weeks to reach the surface.
Nigeria’s production fell to 1.31 MMbpd in February, the lowest level in 17 months, largely due to maintenance work at a 225,000 bpd production facility operated by Shell Plc.
Output has yet to recover to peaks above 2 MMbpd, limiting the country’s ability to capitalize on rising crude prices relative to its peers. The OPEC member averaged 1.34 MMbpd in 2022, when oil surged to as much as $130 a barrel following Russia’s invasion of Ukraine.
The regulator approved 500 permits to reopen old wells in 2024, including for Tony Elumelu’s Heirs Energy and Seplat Energy Plc.
The government set a production target of 1.84 MMbpd this year, which the country has struggled to meet.
