In a bold move to revive Nigeria’s declining offshore oil output and expand national revenue, the Federal Government has outlined a strategic initiative to extract an additional 810,000 barrels of crude oil per day (bpd) from the country’s deepwater oil fields. Spearheaded by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the cluster and nodal development strategy aims to unlock untapped reserves and restore Nigeria’s status as a top-tier oil producer in the global energy market.
Speaking at a stakeholders’ workshop in Abuja, NUPRC Chief Executive Gbenga Komolafe—represented by Executive Commissioner Babajide Fashina—highlighted the urgency of addressing the nation’s dwindling deepwater output. Themed “Harnessing the Potential of Deep/Shallow Water Oil and Gas Accumulations through Clusters/Nodal Development,” the event brought together key players in the oil and gas sector to strategize around shared infrastructure and streamlined production.
Komolafe noted that Nigeria’s deepwater production peaked at around 800,000bpd in 2016 but has since dropped below 500,000bpd. “We are sitting on over 5.13 billion barrels of oil and 13.53 trillion cubic feet of gas in deepwater acreages,” he said. “Of this, 3.59 billion barrels are in 2P reserves—proven and probable—but remain undeveloped.”
According to NUPRC’s data, existing Field Development Plans (FDPs), if executed, could unlock 1.55 billion barrels of oil and condensate, as well as 1.49 trillion cubic feet of associated gas. This would translate to an additional 810,000bpd, boosting Nigeria’s average daily crude and condensate production from the current 1.75 million barrels to potentially over 2.5 million barrels.
A key part of the initiative is the formation of a Shallow and Deepwater Cluster Development Committee within the NUPRC. This body will collaborate with international and indigenous oil producers to group smaller fields into economically viable clusters, share infrastructure, and minimize technical costs. “Our goal is more than just increasing barrels; it’s about creating long-term value, energy security, and prosperity,” Komolafe said.
Deepwater reserves currently account for 18% of Nigeria’s total oil and condensate volumes, with legacy assets like Bonga, Agbami, and Egina contributing significantly. Since the inception of deepwater drilling, over 4.4 billion barrels have been extracted. However, Komolafe warned that unless immediate, collective action is taken, Nigeria’s upstream sector could face stagnation within the next five years.
Executive Commissioner for Development and Production, Enorense Amadasu, emphasized the urgency of implementing already-approved FDPs and utilizing cost-saving measures such as nodal development frameworks. “Projects like Bonga North are already advancing, but others—Owowo, Zaba Zaba, Eta, and NAE—need to follow suit,” he stated.
Amadasu also disclosed that Nigeria has offered 31 deepwater blocks since 2022, yet actual output has failed to reflect the sector’s vast potential due to challenges like delayed Final Investment Decisions (FIDs), high technology costs, and project viability concerns.
“Many of these fields cannot stand alone economically. Cluster development is the way forward. By sharing platforms, pipelines, and logistics, we make smaller fields commercially viable,” Amadasu explained.
To support this goal, the NUPRC has formed a technical Deepwater Cluster Development Committee to identify high-potential groupings, with a broader, industry-wide task force also in the pipeline. Subcommittees will address infrastructure needs, economics, policy alignment, and reserve validation.
Government incentives are already being deployed. Under the Petroleum Industry Act (PIA), deepwater assets enjoy zero hydrocarbon tax, with further fiscal directives—Presidential Orders 40, 41, and 42—focused on tax waivers for gas, accelerated local content, and reduced procurement timelines.
“Despite these interventions, the sector hasn’t reached full optimization,” Amadasu noted. “Our deepwater future depends on collective action now. Otherwise, we risk falling further behind in the global upstream race.”
The renewed focus on deepwater development is expected to contribute significantly to Nigeria’s economic diversification, job creation, and energy stability, making it a cornerstone of the country’s broader oil sector reform agenda.