₦airaland Forum

ExxonMobil is committing about $1 billion to a deepwater oil project in Nigeria in what marks its return to drilling in the country after nearly a decade, with the development expected to add 40,000 barrels of crude oil per day as Africa's largest producer seeks to revive investment and reverse years of declining output.

The U.S. oil major, through its Nigerian affiliate Esso Exploration and Production Nigeria (Offshore East) Limited, has commenced work on the Usan Infill Project in Oil Mining Lease (OML) 138, marking its first drilling campaign in Nigeria since 2016.

The investment, announced on Wednesday during NOG Energy Week in Abuja, is expected to deliver first oil within 18 months and increase production from the Usan Floating Production, Storage and Offloading (FPSO) facility through new infill wells identified after seismic studies completed in 2024.

The $1 billion project is being funded by Esso and its partners in OML 138, Chevron, TotalEnergies and Nexen, a subsidiary of China’s CNOOC, under a production-sharing contract with NNPC Ltd.

The announcement is significant for Nigeria’s oil industry, where international energy companies have scaled back investment over the past decade amid regulatory uncertainty, security concerns, crude theft and years of underinvestment.

While several majors have exited onshore and shallow-water assets, many have shifted their focus to deepwater projects, which are considered more secure and commercially attractive.

The investment also signals growing confidence in reforms introduced under Nigeria’s Petroleum Industry Act (PIA), which the government hopes will unlock fresh upstream capital and help restore crude production.

“This initiative carries particular importance as it aligns with the commission’s objective to revitalise activity within Nigeria’s deepwater assets,” Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemyiwa Eyesan, said at the project launch.

“With Esso’s last drilling operation dating back to 2016, the resumption of drilling signals renewed potential and value in our deepwater acreage.”

Eyesan described the project as a strategic investment that demonstrates how targeted spending on existing assets can quickly boost production.

“One billion dollars invested to unlock 40,000 barrels of oil. This initiative carries particular importance as it aligns with the commission’s objective to revitalise activity within Nigeria’s deepwater assets,” she said.

She added that the investment comes at a critical time for Nigeria’s offshore industry.

“Many of our deepwater assets are operating with low capacity today. For the past 10 years, not much has happened, and I think this is a commendable effort by Esso.”

ExxonMobil said the Usan Infill Project forms part of its long-term strategy to strengthen its deepwater portfolio in Nigeria following the divestment of most of its shallow-water assets.

“The start of the Usan Infill Project reflects ExxonMobil’s continued focus on developing our deepwater portfolio in Nigeria,” Jagir Baxi, chairman and managing director of ExxonMobil affiliates in Nigeria, said.

“By applying advanced technology and leveraging our proven execution capabilities, we aim to safely and efficiently increase production and deliver value for our stakeholders while supporting Nigeria’s economic development.”

According to the company, the project follows high-quality seismic data acquisition and processing completed in 2024, which identified new drilling opportunities within the Usan field.

It also acknowledged support from the NUPRC, the Nigerian Content Development and Monitoring Board (NCDMB), NNPC Ltd. and its joint venture partners in bringing the project to execution.

The Usan field, located offshore in OML 138, has been producing since 2012. Rather than developing an entirely new oilfield, the infill project targets additional reserves around existing infrastructure, allowing production to increase more quickly and at lower cost than building a new deepwater development from scratch.

The project comes as Nigeria intensifies efforts to restore crude production and attract fresh exploration spending.

During the same event, the NUPRC presented 19 petroleum prospecting licences awarded under the 2022/2023 Mini Bid Round and the 2024 Licensing Round as part of broader efforts to stimulate upstream investment.

Africa’s largest oil producer has struggled to consistently meet its production targets in recent years because of oil theft, pipeline vandalism, ageing infrastructure and delayed investment decisions.

The government is banking on renewed offshore investment from companies such as ExxonMobil to increase production, boost government revenues and strengthen long-term energy security.

OlaOfLagos:
I hope the tax master won’t chase them away

OlaOfLagos:
I hope the tax master won’t chase them away

toprealman:
Audio return! Same way they claimed that the NNPC refinery has commenced production again.

OlaOfLagos:
I hope the tax master won’t chase them away

iwaeda:
ExxonMobil never left Nigeria. They only divest to Seplat, they still maintain strong offshore presence.

Suicideboy:
Exxonmobil is not seplat

iwaeda:
ExxonMobil never left Nigeria. They only divest to Seplat, they still maintain strong offshore presence. Propaganda has limit. They are at Karaa Place, Osborne Foreshore, Ilubirin.

IamAtAnger:
Na here Tinubu started him journey as Accountant/Auditor in th 80s. Sentiment aside... this guy's a genius

iwaeda:
ExxonMobil never left Nigeria. They only divest to Seplat, they still maintain strong offshore presence. Propaganda has limit. They are at Karaa Place, Osborne Foreshore, Ilubirin.