NIGERIA SEALS FIRST POST-PIA DEEPWATER PSC WITH TOTALENERGIES, SAPETRO

Nigeria signs landmark $10m deepwater contract with TotalEnergies, boosting investment and energy security.

Nigeria Sapetro Totalenergies Deepwater production sharing contract Oil and gas Africa Investment Crude production Energy security.
NUPRC, TotalEnergies and Sapetro signs first deepwater Production Sharing Contract
NUPRC, TotalEnergies and Sapetro signs first deepwater Production Sharing Contract


Nigeria has signed its first deepwater Production Sharing Contract (PSC) under the Petroleum Industry Act (PIA), marking a historic milestone in the country’s upstream oil and gas sector.

The agreement, executed on Monday in Abuja between the Federal Government, TotalEnergies, and South Atlantic Petroleum (Sapetro), covers Petroleum Prospecting Licences (PPLs) 2000 and 2001 awarded during the 2024 Licensing Round.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) confirmed that the deal features a $10 million signature bonus and performance-based incentives, including production bonuses tied to output milestones of 35 million and 100 million barrels.

Speaking at the signing, NUPRC Chief Executive, Gbenga Komolafe, said the PSC provides clarity on cost recovery, profit sharing, royalties, host community obligations, and environmental safeguards, aligning with international best practices.

“This agreement is more than documents; it is about laying the foundation for new exploration and investment. This PSC signals the start of a committed work programme that will help us unlock the untapped geological potential of our deepwater, expand our reserves, boost production, and strengthen Nigeria’s energy security. It also affirms our broader vision to make Nigeria the premier destination for upstream investment in Africa,” Komolafe stated.

He praised President Bola Tinubu’s reforms in the industry, citing the 2024 executive orders on fiscal incentives and contract timelines as catalysts that restored investor confidence in Nigeria’s oil and gas.

Also speaking, the Group CEO of the Nigerian National Petroleum Company Limited (NNPC), Bayo Ojulari, described the contract as “unique,” being the first PSC to comprehensively integrate both crude oil and natural gas terms. He said the agreement incentivises gas monetisation and sets a cost recovery limit at 70 per cent, making it attractive to investors while safeguarding national interests.

TotalEnergies Country Chair, Matthieu Bouyer, reaffirmed the company’s long-standing commitment to Nigeria, noting its 60-year presence and ongoing operations of over 400,000 barrels of oil equivalent per day. He pledged that the consortium would deliver low-cost, low-emissions developments while creating jobs and value for the country.

The PSC is expected to contribute significantly to Nigeria’s goal of raising crude production to three million barrels per day and cement the country’s position as a leading upstream investment destination in Africa.

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