Nigeria has signed a landmark deepwater oil production contract with TotalEnergies and indigenous partner South Atlantic Petroleum (Sapetro), in a move that could reshape its petroleum sector and reignite investor confidence.
The deal covers offshore blocs in Nigeria’s oil-rich waters and is structured under a Production Sharing Contract (PSC) model, aligning with the country’s new fiscal regime introduced by the Petroleum Industry Act (PIA).
Why This Matters
- Energy Security: With crude production hovering around 1.4 million barrels per day, far below OPEC quotas, this contract could boost Nigeria’s output.
- Investor Confidence: It signals that foreign investors, once hesitant due to regulatory uncertainty, may now view Nigeria as a stable environment for long-term projects.
- Local Content Push: The partnership with Sapetro also highlights Nigeria’s push for greater indigenous participation in deepwater ventures.
Risks and Challenges
While the deal looks promising, issues like oil theft, sabotage, and insecurity in the Niger Delta remain serious risks. In addition, the volatility of global oil prices could affect long-term returns.