Abuja: Nigeria has taken a major step in revitalizing its upstream energy sector by signing a production-sharing contract (PSC) with French energy giant TotalEnergies and its Nigerian partner, South Atlantic Petroleum (Sapetro). The agreement covers two strategic offshore blocks petroleum prospecting licences (PPLs) 2000 and 2001 located in the Niger Delta Basin, a region central to the country’s hydrocarbon wealth.
Under the terms of the contract, TotalEnergies will command an 80% stake, while Sapetro will hold the remaining 20%. The licences, awarded during Nigeria’s 2024 licensing round, span an area of nearly 2,000 square kilometers. Energy officials have described the deal as one of the most significant commitments to Nigeria’s deepwater sector in recent years.
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), hailed the contract as a “game-changer” for the nation’s energy future. “This agreement signals the beginning of a work programme that will unlock our deepwater geological potential, boost reserves, expand production, and guarantee Nigeria’s energy security,” Komolafe said during the signing ceremony.
The PSC is structured to balance commercial interests with national priorities. It includes financial commitments such as signature and production bonuses, as well as clearly defined profit-sharing mechanisms. Beyond revenue, the deal obliges the companies to fulfill environmental responsibilities through decommissioning and remediation funds. A dedicated framework for host community development has also been incorporated, ensuring local populations share in the benefits of the project.
Nigeria, Africa’s largest oil producer, has faced a decline in foreign investment in recent years, coupled with increasing global calls to transition away from fossil fuels. By striking this deal, the government aims not only to harness untapped reserves but also to restore investor confidence in its energy sector. Officials believe that deepwater exploration offers an opportunity to sustain production at a time when mature onshore and shallow-water fields are declining.
While the agreement demonstrates Nigeria’s determination to reinforce its status as an energy powerhouse, it also highlights the country’s delicate balancing act between economic reliance on oil and international pressure to pivot toward renewable energy. By focusing on offshore potential, Nigeria hopes to extend the life of its petroleum sector while laying groundwork for longer-term diversification.