Uche Cecil Izuora
Amid the Middle East conflict, Big Oil firms are trying to minimize losses on curtailed production and barrels not lifted because of the Strait of Hormuz crisis.
They are betting on high-impact exploration and upstream projects in hotspots such as Nigeria, Guyana, Suriname, Namibia, Brazil, Turkey, and Cyprus among others.
Oil major, Chevron has just appeared the most high-profile winner in Nigeria’s latest licensing round, which was wrapped up on Tuesday evening.
The US supermajor was one of 31 companies, nearly all of them indigenous, which succeeded in being awarded 37 of the 50 blocks on offer in a commercial bid opening event held in Abuja on Tuesday that lasted the entire working day, albeit with a break for lunch.
A total of 143 companies submitted 200 bids for 37 blocks in the proven onshore, shallow-water and deep-water Niger Delta plays as well as four frontier onshore basins — Benin, Anambra Chad and Benue Trough. A total of 13 of the tracts on offer failed to attract interest.
The event was organised by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), which pointed out that these frontier plays attracted an unprecedented level of investor interest.
In a competition to secure Petroleum Prospecting Licence (PPL) 2010, Chevron got the better of a rival bidder to secure a block it knows well.
This acreage lies in water depths of 200 to 700 metres and is fully covered by 3D seismic acquired years ago by Chevron.
The PPL 2010 is located close to Chevron’s big Agbami field and its Ikija discovery, which could be appraised this year.
Also, Exxon and Chevron are doubling down on the billions of barrels of crude oil discovered offshore Guyana. Separately, Chevron is boosting its business in Venezuela where the Trump Administration hopes U.S. firms would increase production and oil exports to the United States.
Exxon, for its part, expects to invest billions of U.S. dollars in Nigeria’s deepwater oil and gas fields. Exxon is progressing the $7-$8 billion billion-barrel Owowo deepwater project offshore Nigeria, “looking into an FID as early as next year,” Hunter Farris, Senior Vice President – Deepwater for ExxonMobil Upstream Company, said in April.
That’s only one of Exxon’s new projects in Africa’s top oil producer, which has raised its crude oil sales in Asia in recent months as refiners reel from the shock supply loss from the Middle East.
ExxonMobil’s subsidiary in Nigeria and its partners earlier this month committed $1 billion to the on-block activities for the Usan Infill Project in OML 138. The project will unlock 40,000 additional barrels of crude oil in 18 months. It also “signifies renewed interest and hope in Nigeria being Esso’s first major deep water project in the country since 2016,” the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said in early July.
Elsewhere, BP in April bought into three offshore exploration blocks in Namibia, one of the hottest exploration destinations, where Shell, TotalEnergies, and Galp have already made large oil discoveries.
TotalEnergies in April signed a Memorandum of Understanding with Türkiye Petrolleri Anonim Ortakl??? (TPAO) to evaluate exploration opportunities in the Black Sea region and internationally.
Companies are also increasingly looking at shale opportunities outside the U.S., with Argentina, China, Turkey, and Australia drawing interest for potential development of onshore resources far away from the Middle East.
Oil and gas exploration has created a lot of value for the industry in recent years.
The industry created $54 billion of value after deducting $97 billion of spend on exploration from 2021 to 2025, under a long-term Brent price of $65 per barrel, an analysis by energy consultancy Wood Mackenzie showed in April.
At $85 per barrel Brent, value creation more than doubles to $120 billion, according to WoodMac