ExxonMobil returns to Africa’s biggest oil producer with $1billion bet after nearly a decade
The U.S. oil major, through its Nigerian affiliate Esso Exploration and Production Nigeria (Offshore East) Limited, has commenced work on the Usan Infill Project in Oil Mining Lease (OML) 138, marking its first drilling campaign in Nigeria since 2016.
The investment, announced on Wednesday during NOG Energy Week in Abuja, is expected to deliver first oil within 18 months and increase production from the Usan Floating Production, Storage and Offloading (FPSO) facility through new infill wells identified after seismic studies completed in 2024.
The $1 billion project is being funded by Esso and its partners in OML 138, Chevron, TotalEnergies and Nexen, a subsidiary of China’s CNOOC, under a production-sharing contract with NNPC Ltd.
The announcement is significant for Nigeria’s oil industry, where international energy companies have scaled back investment over the past decade amid regulatory uncertainty, security concerns, crude theft and years of underinvestment.
While several majors have exited onshore and shallow-water assets, many have shifted their focus to deepwater projects, which are considered more secure and commercially attractive.
The investment also signals growing confidence in reforms introduced under Nigeria’s Petroleum Industry Act (PIA), which the government hopes will unlock fresh upstream capital and help restore crude production.
“This initiative carries particular importance as it aligns with the commission’s objective to revitalise activity within Nigeria’s deepwater assets,” Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemyiwa Eyesan, said at the project launch.
With Esso’s last drilling operation dating back to 2016, the resumption of drilling signals renewed potential and value in our deepwater acreage.”
Eyesan described the project as a strategic investment that demonstrates how targeted spending on existing assets can quickly boost production.
She added that the investment comes at a critical time for Nigeria’s offshore industry.
“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.”
ExxonMobil said the Usan Infill Project forms part of its long-term strategy to strengthen its deepwater portfolio in Nigeria following the divestment of most of its shallow-water assets.
“The start of the Usan Infill Project reflects ExxonMobil’s continued focus on developing our deepwater portfolio in Nigeria,” Jagir Baxi, chairman and managing director of ExxonMobil affiliates in Nigeria, said.
“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.”
According to the company, the project follows high-quality seismic data acquisition and processing completed in 2024, which identified new drilling opportunities within the Usan field.
It also acknowledged support from the NUPRC, the Nigerian Content Development and Monitoring Board (NCDMB), NNPC Ltd. and its joint venture partners in bringing the project to execution.
The Usan field, located offshore in OML 138, has been producing since 2012. Rather than developing an entirely new oilfield, the infill project targets additional reserves around existing infrastructure, allowing production to increase more quickly and at lower cost than building a new deepwater development from scratch.
Source: Africabusinessinsider