Nigeria has finalized a production-sharing contract (PSC) with TotalEnergies and South Atlantic Petroleum for two offshore blocks, marking a significant move to enhance exploration and attract investment under its new oil framework. As Africa’s largest oil producer, Nigeria aims to revitalize its upstream sector in the face of global energy transition challenges and decreasing fossil fuel investments. The agreement pertains to petroleum prospecting licenses 2000 and 2001, awarded during the 2024 licensing round, encompassing approximately 2,000 square kilometers in the Niger Delta Basin.
TotalEnergies will hold an 80% interest in the contract, while Sapetro will retain 20%, according to the Nigerian Upstream Petroleum Regulatory Commission. Gbenga Komolafe, the Commission’s Chief Executive, stated that this PSC marks the beginning of a dedicated work program aimed at unlocking the untapped geological potential of Nigeria’s deepwater resources, thereby expanding reserves, increasing production, and enhancing the country’s energy security.
The contract includes provisions for signature and production bonuses, minimum work obligations, profit-sharing arrangements, and commitments to community development. It also incorporates environmental safeguards such as funds for decommissioning and remediation. This agreement reflects Nigeria’s efforts to navigate the evolving energy landscape while seeking to bolster its oil sector and secure future investments.