Nigeria Inks Production-Sharing Contract with TotalEnergies and Local Firm for Offshore Blocks
Nigeria has recently signed a production-sharing contract (PSC) with TotalEnergies and local company South Atlantic Petroleum for two offshore blocks, marking a significant move to enhance exploration activities and attract investments under the country’s new oil framework.
As the largest oil producer in Africa, Nigeria is making efforts to revitalize its upstream sector amidst the global shift towards cleaner energy sources and the decreasing investments in traditional fossil fuels.
The PSC agreement encompasses petroleum prospecting licenses 2000 and 2001, which were granted during the 2024 licensing round. These blocks cover an area of approximately 2,000 square km (772 square miles) in the Niger Delta Basin. TotalEnergies holds an 80% contractor interest in the project, while Sapetro holds the remaining 20%, according to the upstream oil regulator.
Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, expressed optimism about the new contract, stating, “This PSC signals the start of a committed work programme that will help us unlock the untapped geological potential of our deepwater, expand our reserves, boost production, and strengthen Nigeria’s energy security.”
The agreement includes various provisions such as signature and production bonuses, minimum work guarantees, profit-sharing arrangements, and commitments to comply with host community development obligations. Additionally, it outlines environmental safeguards, including provisions for decommissioning and remediation funds to address any potential environmental impacts.
It is evident that Nigeria is taking proactive steps to attract investment in its oil and gas sector while ensuring sustainable practices and community development. The signing of this production-sharing contract is expected to drive further exploration activities, enhance production capabilities, and contribute to the overall energy security of the country.
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