Nigeria is pushing forward with efforts to revive its deepwater oil and gas sector as TotalEnergies and South Atlantic Petroleum (Sapetro) signed a Production Sharing Contract (PSC) on Monday for two offshore blocks in the Niger Delta Basin.
Investor-Friendly Reforms
The agreement covers Petroleum Prospecting Licences 2000 and 2001, which the government awarded during the 2024 licensing round.
Rather than treat the deal as a routine transaction, Abuja framed it as proof of reform, using the Petroleum Industry Act (PIA) to attract fresh capital and expertise.
Speaking at the ceremony, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, emphasised that Nigeria now competes on a global scale.
He explained that the government deliberately shifted away from heavy upfront signature bonuses and instead adopted lighter terms, just as Brazil and Guyana have done, to win investors’ confidence.
Gas And Growth Targets
In addition, the PSC sets strict obligations.
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Investors must fund host community projects, commercialise gas to reduce flaring, and commit to environmental remediation.
The contract also spells out production and profit splits, ensuring both Nigeria and the operators gain value.
Meanwhile, NNPC Limited, acting as concessionaire, hailed the deal as a milestone.
Group CEO Bashir Ojulari highlighted that this marks the first deepwater PSC since the licensing round and the first with strong gas provisions.
He pointed out that robust incentives for monetising non-associated gas will help Nigeria reach its target of three million barrels per day and attract $60 billion in investment by 2030.
Ultimately, TotalEnergies and Sapetro view the contract as a gateway to growth, while Nigeria positions it as momentum—deepwater exploration driving the country’s energy future.
