ExxonMobil leads fresh investment drive as NUPRC awards 19 oil licences
The investment marks ExxonMobil's first drilling campaign in Nigeria since 2016, and signals renewed momentum for deepwater exploration as regulators push to lift crude oil production.
Nigeria’s push to revive investment in its oil and gas sector received a major boost on Wednesday as ExxonMobil committed US$1 billion to a new deepwater project while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) awarded 19 new oil exploration licences aimed at unlocking fresh production.
The twin developments, announced at the 25th Nigeria Oil and Gas Energy Week Conference and Exhibition in Abuja, underscore growing efforts to restore investor confidence in Nigeria’s upstream sector following years of declining investment, project delays and falling crude oil output.
ExxonMobil’s investment will fund the Usan Infill Project in Oil Mining Lease 138, with the project expected to add about 40,000 barrels of crude oil per day once production begins.
The Commission Chief Executive of the NUPRC, Gbenga Komolafe, described the investment as a significant milestone for Nigeria’s offshore industry, noting that it marks ExxonMobil’s return to drilling activities after almost a decade.
According to the commission, Esso Exploration and Production Nigeria, ExxonMobil’s Nigerian affiliate and operator of the Usan field, has not carried out any drilling campaign since 2016.
“The resumption of drilling signals renewed potential and value in our deepwater acreage,” the commission said, describing the investment as a strong vote of confidence in Nigeria’s upstream petroleum reforms and investment climate.
Komolafe said the commission remains committed to advancing deepwater projects because they are essential to increasing crude oil production, expanding reserves, boosting government revenue and strengthening investor confidence.
Also Read: Nigeria’s next oil boom puts local content gains under the spotlight
He added that increased offshore investments would also support local content development, create jobs and help maximise the value of Nigeria’s hydrocarbon resources.
Speaking during the announcement, Managing Director of ExxonMobil affiliates in Nigeria, Jagir Baxi, commended the NUPRC and other government agencies for creating an environment that made the investment possible.
The Usan field is operated by Esso Exploration and Production Nigeria under a Production Sharing Contract with NNPC Limited. Other partners in the block include Chevron, TotalEnergies and Nexen, a wholly owned subsidiary of CNOOC.
ExxonMobil described the project as a short-cycle investment, with first oil expected within 18 months after seismic data identified the new drilling opportunity.
Beyond the deepwater investment, the NUPRC also handed Petroleum Prospecting Licences to successful bidders from the concluded 2022/2023 Mini Bid Round and the 2024 Licensing Round as part of efforts to stimulate fresh exploration across the country’s offshore and onshore basins.
A total of 12 companies received 19 Petroleum Prospecting Licences covering deep offshore, shallow water and continental shelf assets.
Among the awardees were Broron Energy Limited, Petroli Energy Marketing and Supply Limited, Sahara Deepwater Resources Limited and Tulcan Energy E&P Company. The commission said companies whose representatives were absent would complete their licence execution at later dates.
According to the regulator, the licences represent another step towards accelerating exploration activities, growing Nigeria’s hydrocarbon reserves and attracting long-term investment into the upstream sector.
The announcements come as Nigeria intensifies efforts to raise crude oil production above two million barrels per day through a combination of new investments, improved regulation and fiscal reforms introduced under the Petroleum Industry Act.
Deepwater projects have become increasingly important to that ambition because they are generally less exposed to crude oil theft and pipeline vandalism that have disrupted production in many onshore fields.
The combination of ExxonMobil’s return to drilling and the award of new exploration licences is expected to inject fresh momentum into Nigeria’s upstream industry, with regulators hoping the renewed investment appetite will translate into higher production, stronger government revenue and increased confidence among both existing and prospective investors.
