US oil giant nears a $10 billion investment decision with Africa’s largest oil producer.
The company first touted the deal back in September 2024, following a meeting in New York between some of its executives and Nigeria’s vice president, Kashim Shettima.
After the meeting, the company revealed that it would be sinking $10 billion into deep-water oil projects in Nigeria with the intent to increase its oil production in the West African country to 180,000 barrels per day (bpd).
The initial phase of this investment will involve an infill drilling campaign at the Usan deep-water asset, an oil production facility, currently valued at $1 billion.
xxon has already allocated 30% of these funds and expects to formalize its investment readiness within several months.
So far, the company has revealed that it has only inched closer to a decision, but has yet to fully commit to the projects.
The Chairman and Managing Director of ExxonMobil Affiliate in Nigeria, Mr. Jagir Baxi, stated that ExxonMobil does plan to “declare the investment ready in a short while.”
He made the revelation at the sidelines of an event, commemorating 20 years of continuous oil production at the Erha oil producing asset by Esso Exploration and Production Nigeria Limited (EEPNL), Exxon’s affiliate and operating company in Nigeria.
The managing director clarified that the project would necessitate new subsea connections, wells, and infrastructure in addition to utilizing the current Usan FPSO capacity and capability.
He further indicated that the company has been engaging with key stakeholders, including the Nigerian Content Development and Monitoring Board (NCDMB), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian National Petroleum Corporation (NNPC Ltd) in its capacity as concessionaire, alongside partners in OML 138.
These collaborative efforts are aimed at satisfying all regulatory and technical prerequisites necessary to reach a Final Investment Decision (FID).
During his interview with THISDAY, Baxi stated, “Back to the comment I made about seismic result, it became clear that there is a resource, it’s material, it’s valuable, it can be produced with relative speed, different from a brand-new greenfield FID.
Furthermore, as mentioned earlier, he disclosed that ExxonMobil has already allocated 30% of the projected $1 billion capital required for the initial phases of the Usan infill drilling program.
“And we are closing in on the point where all the important execution enablers will be clear and in place, and provide us the basis to declare that investment as ready to go. So, we’re excited that it’s close to the point you made. It will provide new production from deepwater in the near term,” he said.
“Within months of the campaign starting, we’ll be able to produce from this investment.
The investment runs through almost all next year as a total campaign. It’s worth about one billion dollars in total, and we have already committed around 30 per cent of that in the early works, the early long-lead equipment, and in the foundational contracts.
That’s about the time a typical large investment would reach FID readiness. So, we’ll cross that gate or that milestone very soon,” he added.
Per the managing director, the total investment required to construct Owowo, a significant deep-water project awaiting FID, was between $7 billion and $8 billion.
“You should think about Owowo at the seven-to-eight-billion-dollar range plus,” he said.
He also described the deep water project as the tip of the spear and “the one that we are also maturing rapidly behind Usan infill as the lead investment”.
Baxi explained that the Owowo asset would have 20 to 40 wells in a complete development case, which is more than the Erha and Bonga tiebacks, which have 10 to 15 wells, respectively.
Source: Africabusinessinsider