Nigeria is making waves in the deep-water frontier
On September 1, 2025, the Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), signed a landmark $10 million production‑sharing contract (PSC) with TotalEnergies (80%) and local partner South Atlantic Petroleum (Sapetro, 20%) for two offshore blocks (PPL 2000 & 2001), covering roughly 2,000 km² in the prolific Niger Delta Basin.
The Deal
At the signing ceremony held in Abuja, NUPRC’s CEO, Gbenga Komolafe, called the agreement “a new chapter” in Nigeria’s upstream sector. The PSC includes:
- A $10 million signature bonus, with production bonuses of 2 million barrels at 35 million output and 4 million barrels (or cash equivalent) at 100 million barrels.
- Structured incentives: minimum work commitments, cost recovery terms, profit oil sharing, royalties, and gas-utilization stipulations.
- Community & environmental safeguards: decommissioning funds, environmental remediation, and host community development obligations.
Reform, Investment & Energy Security
- Reform-Driven Momentum
President Bola Tinubu’s 2024 executive orders—covering fiscal incentives, local content, and reduced contract timelines—were instrumental in making the PSC possible. These reforms, grounded in the Petroleum Industry Act (PIA) 2021, have catalyzed investment into previously unexplored deep-water assets.
- Investor-Friendly Terms
By capping the signature bonus at $10 million for deep-water assets (and $7 million for onshore/shallow-water), Nigeria has realigned with international best practices, lowering entry barriers and promoting early development.
- Deep-Water Potential & Security
These blocks — awarded in the 2024 licensing round — are critical for boosting oil reserves, ramping up production, and reinforcing Nigeria’s regional energy leadership.
- Environmental & Social Safeguards
The PSC isn’t just about extraction—it’s about sustainable investment. With strict gas-use provisions and environmental remediation built-in, the contract reflects Nigeria’s commitment to responsible energy development.
Stakeholders Thoughts
- Gbenga Komolafe (NUPRC CEO):
This PSC lays the foundation for exploration, reserve expansion, improved energy security, and positions Nigeria as Africa’s prime upstream investment destination.
- Bayo Ojulari (NNPC Limited CEO):
The deal is unique—covering both crude oil and natural gas and offering robust gas monetization terms—while also aligning with global ESG expectations.
- Matthieu Bouyer (TotalEnergies Nigeria Country Chair):
TotalEnergies reaffirms its long-term commitment to Nigeria—delivering low-carbon footprint developments that bring value to communities and the nation.
Summary at a Glance
| Aspect | Details |
| Date Signed | September 1, 2025 |
| Partners | TotalEnergies (80%), Sapetro (20%) |
| Location | PPL 2000 & 2001, offshore Niger Delta (~2,000 km²) |
| Bonuses | $10M signature; production bonuses at 35M & 100M barrels |
| Key Inclusions | Fiscal terms, environmental/community obligations, gas utilization |
| Significance | Marks deep-water resurgence, backed by reform, inviting global investment |
In Closing
This $10 million PSC is more than just a contract—it’s a symbol of Nigeria’s rebooted upstream ambition. By blending reform-driven policy, investor-friendly terms, and deep-water potential, the nation is charting a compelling narrative in oil and gas development.
As TotalEnergies and Sapetro embark on the exploration journey, all eyes will be on how quickly they deliver results—in production, community development, and Nigeria’s long-term energy security.
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