KEY POINTS
- NNPC, TotalEnergies, and Sapetro sign Nigeria’s first integrated oil-and-gas deepwater PSC under the PIA.
- Deal covers two offshore blocks spanning 2,000 sq km, the first awarded to an IOC in over a decade.
- Contract includes gas monetisation, local content, host community obligations, and environmental safeguards.
The most important deepwater oil and gas deal in over ten years was signed by Nigeria with France’s TotalEnergies and local partner South Atlantic Petroleum, Sapetro, in a historic production sharing agreement. This shows that Africa’s largest crude producer is actively seeking new investment.
The Nigerian Upstream Petroleum Regulatory Commission’s Abuja headquarters hosted the signing of the agreement on Monday. It covers Petroleum Prospecting Licenses (PPLs) 2000 and 2001. Under the Petroleum Industry Act, the eagerly anticipated reform law passed in 2021, it is the first production sharing contract in Nigeria to fully integrate the exploration and production of natural gas and crude oil.
The contract, which goes beyond traditional exploration rights, is a landmark for the nation’s upstream industry, according to Bashir Bayo Ojulari, group chief executive officer of Nigerian National Petroleum Company Ltd.
“This particular PSC is unique in many respects,” he said. “It comprehensively covers both oil and gas, includes robust gas terms, and incentivises the monetisation of non-associated gas. It is not just a contract—it’s a message to the world that Nigeria is open for business.
First Major Deepwater Award in Over a Decade
Following a competitive bidding process, the two offshore blocks, which cover an area of almost 2,000 square kilometers, were awarded. Sapetro keeps 20% of the business, while TotalEnergies owns 80%. Gbenga Komolafe, the chief executive of NUPRC, stated that the Petroleum Industry Act’s reforms were directly responsible for the contract’s competitiveness and transparency.
The agreement strengthens TotalEnergies’ more than 60-year-old presence in Nigeria. The award was described as “a reaffirmation of our deep and enduring commitment to Nigeria” by Matthieu Bouyer, managing director of TotalEnergies E&P Nigeria, who also pointed out that it was the first time an international oil company had acquired new deepwater assets in Nigeria in over a decade.
According to Sapetro CEO Chukwuemeke Anagbogu, the collaboration supports the government’s goals of deeper local content participation and responsible resource development. According to him, the blocks offer a way to increase reserves, maintain steady production growth over the long run, and increase value for both the nation and shareholders.
The terms of the contract extend beyond conventional rights to oil exploration. Performance guarantees, decommissioning and remediation clauses, host community development commitments, and a profit-sharing formula intended to increase openness and strike a balance between operator and state interests are all included. As the government looks to increase domestic gas supply, the agreement also includes pledges to guarantee gas utilization and minimize flaring.
Ojulari said the deal represents one of the most tangible demonstrations yet of the Petroleum Industry Act’s impact. “This contract shows how reforms can unlock value, attract global capital, and boost investor confidence,” he said
