The Nigerian Upstream Petroleum Regulatory Commission has welcomed ExxonMobil’s decision to invest $1bn in the Usan Infill Project located in Oil Mining Lease 138, describing the development as a major milestone capable of reviving deepwater drilling activities and accelerating Nigeria’s crude oil production ambitions.
The investment, announced during the 25th Nigeria Oil and Gas Energy Week Conference and Exhibition in Abuja on Wednesday, is expected to increase production from the Usan field by about 40,000 barrels of crude oil per day.
Reacting shortly after the announcement by the Managing Director of ExxonMobil affiliates in Nigeria, Jagir Baxi, the Commission Chief Executive of the NUPRC, Oritsemyiwa Eyesan, said the investment marked the return of ExxonMobil’s drilling activities in Nigeria after nearly a decade.
According to a statement issued on Wednesday by the Head of Media and Corporate Communications at the commission, Eniola Akinkuotu, Eyesan described the renewed commitment by the oil major as a strong vote of confidence in Nigeria’s upstream petroleum sector and the ongoing reforms introduced under the Petroleum Industry Act.
She said the announcement was particularly significant because Esso Exploration and Production Nigeria –ExxonMobil’s affiliate – had not undertaken any drilling operation since 2016.
The statement read, “The Nigerian Upstream Petroleum Regulatory Commission has commended ExxonMobil and its partners for committing $1bn to the on-block activities for the Usan Infill Project in OML 138.
“The Managing Director of ExxonMobil affiliates in Nigeria, Jagir Baxi, announced the investment commitment at the venue, which is expected to add 40,000 barrels per day.
“With Esso’s last drilling operation dating back to 2016, the resumption of drilling signals renewed potential and value in our deep water acreage.”
Eyesan said the NUPRC remains steadfast in advancing Nigeria’s portfolio of deep water projects, adding that such developments are essential to achieving national production targets, increasing reserves, sustaining government revenues, and bolstering investor confidence.
The NUPRC boss stressed that the commission would continue to support investments capable of unlocking Nigeria’s offshore hydrocarbon resources and raising crude oil production.
She noted that increased investments in offshore projects would not only enhance crude oil production but would also generate employment opportunities, stimulate local content development and improve government earnings at a time when Nigeria is seeking to maximise the benefits of its hydrocarbon resources.
In his remarks earlier, Baxir praised the NUPRC and other government agencies for their role in facilitating the project. Esso Exploration and Production is the operator of OML 138, which contains the Usan field.
The block is operated under a Production Sharing Contract with NNPC Limited. Co-venture partners in OML 138 include Chevron, TotalEnergies, and Nexen, a wholly owned subsidiary of CNOOC.
As a short-cycle investment, the project is expected to sustain and increase production from the Usan field, with first production within 18 months after the seismic data identified the investment opportunity.
Meanwhile, the NUPRC also presented Petroleum Prospecting Licences to successful bidders from the concluded 2022/2023 Mini Bid Round and the Nigeria 2024 Licensing Round, in another move aimed at attracting fresh investments into the country’s upstream sector.
Among the companies presented with licences were Broron Energy Limited, which received PPL 2009; Petroli Energy Marketing and Supply Limited, awarded PPL 269; Sahara Deepwater Resources Limited, which secured PPLs 270 and 271; and Tulcan Energy E&P Company, awarded PPL 2008.
Companies whose representatives were not present will have their execution ceremonies scheduled shortly at mutually convenient dates.
In total, the exercise covers 12 successful awardees across 19 Petroleum Prospecting Licences, comprising a balanced portfolio of deep offshore, shallow water and continental shelf acreages, reflecting the diversity of opportunities offered through the licensing rounds.
According to the NUPRC, the awards represent another significant milestone in Nigeria’s continuing efforts to deepen investment in the upstream petroleum sector, accelerate exploration activities, expand the nation’s hydrocarbon reserves, and create long-term value for the Nigerian economy.
The latest developments come as Nigeria intensifies efforts to raise crude oil production above two million barrels per day and attract fresh capital into its oil and gas industry following years of declining investments, ageing infrastructure, oil theft and project delays.
Since the implementation of the Petroleum Industry Act, the Federal Government and industry regulators have introduced fiscal incentives and regulatory reforms to improve competitiveness and restore investor confidence in the country’s upstream petroleum sector.
The international company’s return to active drilling after almost 10 years, alongside the award of new exploration licences, could signal renewed momentum for Nigeria’s deepwater segment, which has long been regarded as critical to achieving sustainable crude oil production growth and boosting government revenues.
