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Nigeria’s oil and gas industry is experiencing a significant revival as major international oil companies (IOCs) seek to re-establish or expand their presence in the country’s offshore sector. Following years of divestment, regulatory uncertainty, and declining investments, energy giants such as ExxonMobil, Petrobras, and Shell are once again turning their attention to Nigeria’s vast deepwater oil reserves. This renewed interest signals a pivotal shift driven by recent reforms, improved policy direction, and an evolving global energy landscape.
A Renewed Push Toward Deepwater Opportunities
Deepwater oil exploration is emerging as the centerpiece of Nigeria’s upstream oil revival strategy. With shallow and onshore reserves maturing and environmental challenges complicating land-based operations, the government is focusing on offshore blocks, which remain relatively untapped. According to Nigeria’s Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, over $8 billion in Final Investment Decisions (FIDs) have been secured in the deepwater oil and gas segment within the past year alone a clear indication that investor confidence is returning.
Nigeria’s deep offshore basins are estimated to hold billions of barrels in untapped reserves, and new investment could help increase national output significantly at a time when the country is struggling to meet OPEC production quotas.
ExxonMobil Commits $1.5 Billion to Usan Oil Field Development
One of the most significant developments is ExxonMobil’s $1.5 billion investment in Nigeria’s deepwater oil sector. The U.S.-based supermajor is set to inject the funds into revitalizing production at the Usan oil field, located offshore in Oil Mining Lease (OML) 138. The investment, scheduled between Q2 2025 and 2027, is aimed at increasing Nigeria’s daily crude oil production and enhancing long-term reserves.
ExxonMobil has already submitted its Field Development Plan and is targeting a Final Investment Decision (FID) by late Q3 2025. The project is anticipated to deliver over 50,000 barrels per day upon completion, offering a major boost to Nigeria’s efforts to raise national output amid fluctuating global oil prices and a competitive energy market.
Petrobras Returns After More Than a Decade
Brazil’s state oil company, Petrobras, is also in talks with Nigerian authorities to re-enter the local oil market, more than a decade after it exited to focus on domestic pre-salt developments. Petrobras is reportedly seeking frontier deepwater acreage, attracted by Nigeria’s recent reform-driven business environment and the potential of new exploration blocks.
According to Minister Lokpobiri, Petrobras has expressed strong interest in participating in future licensing rounds and may pursue strategic partnerships with Nigerian companies to fast-track re-entry into the sector. This move not only reflects Nigeria’s success in attracting diverse international partners but also underscores the global appetite for deepwater exploration amid rising energy demands.
Shell Moves Forward with Bonga North Deepwater Project
Another milestone in Nigeria’s deepwater journey is Shell’s final investment decision for the Bonga North development, an extension of its existing Bonga field operated by Shell Nigeria Exploration and Production Company (SNEPCo). The project involves connecting new wells to Shell’s existing Floating Production Storage and Offloading (FPSO) vessel.
Bonga North holds an estimated 300 million barrels of oil equivalent and is projected to reach peak production of 110,000 barrels per day. The first oil is expected before 2030. This project solidifies Shell’s long-term commitment to Nigeria and is part of a broader effort to optimize production from existing assets while tapping new reserves in deepwater zones.
Policy Reforms: The Catalyst Behind the Comeback
Much of this renewed foreign interest can be attributed to reforms implemented by President Bola Ahmed Tinubu’s administration and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Key among these are the Petroleum Industry Act (PIA) of 2021, which overhauled the legal and fiscal frameworks governing the oil and gas sector.
The Tinubu-led government has taken additional steps to remove bureaucratic bottlenecks, increase transparency, and provide investment incentives. These measures include streamlined licensing processes, clearer fiscal terms for deepwater exploration, and incentives for energy companies to reinvest in existing fields.
The administration has also prioritized resolving disputes with IOCs and ensuring the implementation of legacy project agreements. As a result, Nigeria is once again seen as a favorable destination for energy investment, particularly in offshore ventures.
Strategic and Economic Implications
The return of global oil giants and the surge in deepwater investment come at a critical time for Nigeria. The country’s oil production has been hampered in recent years by pipeline vandalism, theft, and underinvestment. By shifting focus offshore, where such issues are less prevalent, Nigeria hopes to boost daily crude output from the current average of around 1.4 million barrels per day to meet and exceed its OPEC quota of 1.8 million barrels per day.
Increased deepwater production will not only stabilize foreign exchange earnings but also contribute to government revenues and energy security. Furthermore, these projects are expected to create thousands of direct and indirect jobs, stimulate local supply chains, and boost investor confidence in Africa’s largest oil producer.
Looking Ahead: A Revived Future for Nigeria’s Oil Industry
Nigeria’s deepwater prospects are now at the center of a strategic reawakening in the country’s oil and gas industry. The combination of international re-engagement, multibillion-dollar commitments, and structural reforms has set the stage for a more robust, future-proof energy sector.
If the momentum is sustained, and regulatory reforms continue to be effectively implemented, Nigeria could enter a new era of oil production growth one that ensures both economic sustainability and global competitiveness in the face of an evolving energy landscape. With the eyes of the global energy market once again on West Africa, Nigeria stands poised to reclaim its position as a leading oil investment destination.
