Yemisi Izuora
Nigeria is positioning its oil and gas industry with reforms that is leading to several new deals.
Following fiscal reforms and Executive Orders by President Bola Tinubu, Nigeria’s upstream oil operations is attracting more field development just as ExxonMobil and its partners announced plans to invest $1 billion in the Usan Infill Project offshore Nigeria.
The development is expected to add 40,000 barrels per day (bpd) of oil production, Nigeria’s upstream regulator said on Wednesday.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said the investment marks a return to drilling activity by ExxonMobil affiliate Esso Exploration and Production Nigeria in the country, with the company’s last drilling operation dating back to 2016.
Esso Exploration and Production Nigeria (Offshore East) Limited, an affiliate of ExxonMobil, has commenced on-block activities for the $1bn Usan Infill Project in Oil Mining Lease 138, a development expected to add up to 40,000 barrels of oil per day to Nigeria’s crude production.
The company announced the commencement in Abuja on Wednesday during the NOG Energy Week, describing the project as a key milestone in the development of the Usan deepwater field and one that is expected to sustain and increase production from the asset.
According to ExxonMobil, the Usan Infill Project forms part of the broader Usan Field Development Plan and follows the acquisition and processing of high-quality seismic data in 2024, which identified new investment opportunities within the field.
The company said the project, which represents a cumulative investment of about $1bn by Esso and its partners in OML 138, underscores continued confidence in Nigeria’s deepwater oil sector.
It disclosed that first production is expected within 18 months, describing the project as a short-cycle investment that will significantly increase output from the Usan Floating Production Storage and Offloading facility.
Commenting on the development, Chairman and Managing Director of ExxonMobil affiliates in Nigeria, Jagir Baxi, said the project reinforces the company’s long-term commitment to Nigeria’s offshore oil industry.
“The start of the Usan Infill Project reflects ExxonMobil’s continued focus on developing our deepwater portfolio in Nigeria. 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,” Baxi said.
He added that the project demonstrates the company’s confidence in Nigeria’s deepwater resource base and its commitment to responsible resource development.
Baxi also acknowledged the Federal Government’s efforts to improve the investment climate for deepwater oil and gas development, saying the reforms have helped strengthen investor confidence in the sector.
He further commended the support of the company’s co-venture partners in OML 138, as well as key stakeholders, including the Nigerian Upstream Petroleum Regulatory Commission, the Nigerian Content Development and Monitoring Board and NNPC Limited, for enabling the project’s commencement.
Esso said the project highlights the importance of strong partnerships in advancing development and production in Nigeria’s deepwater sector while reinforcing its commitment to creating value for stakeholders.
Speaking at the signing ceremony, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Oritsemeyiwa Eyesan, described the investment as a major milestone for Nigeria’s deepwater oil industry, noting that it aligns with the commission’s objective of revitalising activity in offshore assets.
“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,” Eyesan said.
She noted that the project marks Esso’s return to drilling in Nigeria’s deepwater acreage after a decade. “With Esso’s last drilling operation dating back to 2016, the resumption of drilling signals renewed potential and value in our deepwater acreage. The government has given us renewed hope, and Esso has latched on to that,” she stated.
According to her, the Usan Infill Project exemplifies the type of targeted investment needed to accelerate production growth and reinforce Nigeria’s position as a leading deepwater exploration destination.
“The Usan Infill Project exemplifies targeted near-term investment designed to accelerate production growth and reinforce Nigeria’s status as a leading destination for deepwater exploration. As we advance new developments, it is imperative that we equally prioritise maximising the efficiency of existing assets,” she added.
Eyesan observed that recent production deferments from deepwater platforms underscore the need for continuous investment in facility reliability and asset integrity.
“These insights highlight a crucial opportunity, blending fresh investments with robust asset management practices that ensure every barrel produced is delivered to the market,” she added.
She said the NUPRC remains committed to advancing Nigeria’s portfolio of deepwater projects to achieve national production targets, increase reserves, sustain government revenue and strengthen investor confidence.
“The Usan Infill Project stands among the strategic initiatives supported by the commission to enhance production while upholding operational excellence and regulatory compliance. Our vision is unequivocal: to foster an investment-friendly environment, enable efficient project execution, uphold safety and reliability in our facilities, and fully unlock the value of Nigeria’s hydrocarbon resources,” she stated.
Congratulating Esso and its partners, Eyesan said the investment comes at a critical time when many of Nigeria’s deepwater assets are operating below capacity.
“We appreciate your continued confidence in Nigeria and your contributions to the development of deepwater resources. 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,” she said.
She reaffirmed the commission’s commitment to supporting initiatives that drive investment, boost production, strengthen asset integrity and secure the long-term sustainability of Nigeria’s upstream petroleum sector.
ExxonMobil’s Nigerian affiliate, Esso Exploration and Production Nigeria, operates OML 138, which contains the Usan field under a production-sharing contract with NNPC Ltd.
Esso Exploration and Production Nigeria (Offshore East) Limited is the operator of OML 138 under a production sharing contract with NNPC Limited. Its co-venture partners in the block are Chevron, TotalEnergies, and Nexen, a wholly owned subsidiary of CNOOC.