In a landmark development for Nigeria’s energy sector, the Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has signed a $10 million Production Sharing Contract (PSC) with TotalEnergies and South Atlantic Petroleum (Sapetro) for two offshore blocks in the Niger Delta Basin.
The agreement covers Petroleum Prospecting Licences (PPLs) 2000 and 2001, awarded during the 2024 licensing round, spanning about 2,000 square kilometres of deepwater acreage.
Under the deal, TotalEnergies will operate with an 80% stake, while Sapetro takes a 20% interest.
The fiscal terms of the PSC include a $10 million signature bonus and additional performance-linked incentives.
Production bonuses of two million barrels and four million barrels, or their cash equivalents, will be triggered once cumulative output reaches 35 million and 100 million barrels, respectively.
Speaking at the signing in Abuja, NUPRC Chief Executive Officer, Gbenga Komolafe, described the pact as “a new chapter in Nigeria’s upstream oil and gas industry.”
“This PSC is not just a legal contract. It is a foundation for growth, investment, and exploration.
It will unlock Nigeria’s deepwater potential, expand reserves, strengthen energy security, and accelerate our goal of becoming Africa’s premier destination for upstream investment,” Komolafe said.
Komolafe praised President Bola Tinubu’s bold reforms in the sector, particularly the 2024 executive orders on fiscal incentives, contract streamlining, and local content.
He explained that these measures attracted international oil companies back into the Nigerian market, reversing years of underinvestment.
He added that the new PSC framework provides clarity on cost recovery, profit sharing, royalties, gas utilisation, decommissioning, and host community obligations—all in line with the Petroleum Industry Act (PIA).
“This is a well-structured PSC that balances investor returns with maximum value for the federation,” he stressed.
Also speaking, the Group CEO of Nigerian National Petroleum Company Limited, Bayo Ojulari, hailed the agreement as the first of its kind since the PIA came into force.
“This PSC is unique—it covers both crude oil and natural gas comprehensively, with robust gas monetisation terms.
It also includes a 70% cost recovery limit and performance-based bonuses.
These are strong incentives for efficiency and value delivery,” Ojulari noted.
He emphasized that the deal will help Nigeria inch closer to its ambitious target of three million barrels per day production while encouraging gas-focused exploration to support domestic power generation and LNG expansion.
The Country Chair of TotalEnergies in Nigeria, Matthieu Bouyer, reaffirmed the French energy giant’s commitment to long-term investment in Nigeria.
“TotalEnergies has been here for over 60 years. We employ over 1,800 people locally and contribute significantly to Nigeria’s energy mix. Today’s PSC marks the start of a new journey.
We are determined to deliver low-cost, low-emission projects that will benefit Nigeria and its people,” Bouyer said.
The company currently produces over 400,000 barrels of oil equivalent per day from its Nigerian portfolio and operates an extensive downstream network of over 500 service stations nationwide.
Industry experts see this contract as a crucial step in revitalising Nigeria’s deepwater exploration, which had stagnated for nearly a decade due to fiscal uncertainties and global competition.
Energy analyst Dr. Funmi Adedayo told our correspondent that the deal could spark renewed investor confidence:
“With the new fiscal clarity, international oil companies are more willing to commit capital.
This PSC is not just about $10 million—it represents billions in potential future investment and production growth.”
The NUPRC has also launched a cluster and nodal development initiative, expected to unlock an additional 810,000 barrels per day from deepwater fields in coming years.
For ordinary Nigerians, the PSC’s impact goes beyond barrels and bonuses. Successful execution of the work programme could lead to:
Job creation across oilfield services, logistics, and community engagement.
Energy security, reducing reliance on imports and improving foreign exchange stability.
Revenue growth for government, helping fund infrastructure, education, and healthcare.
Gas development to power industries and expand domestic electricity supply.
As Nigeria navigates a complex global energy landscape, the FG–TotalEnergies–Sapetro deal offers a glimpse of hope that the country can harness its vast resources responsibly while balancing climate goals with economic needs.
“This contract signals that Nigeria is open for business again,” Komolafe concluded.