NNPC, TotalEnergies, Sapetro Seal Landmark PSC Deal on Deepwater Blocks

• Includes provisions for gas utilisation to reduce flaring
• Agreement comprises obligations for decommissioning, environmental remediation, and host community development;

 

Nigeria’s oil and gas landscape witnessed a landmark development this week as the Nigerian National Petroleum Company (NNPC) Ltd signed a Production Sharing Contract (PSC) with a consortium comprising TotalEnergies and South Atlantic Petroleum (Sapetro).

The agreement covers Petroleum Prospecting Licences (PPLs) 2000 and 2001—making it the first PSC in the country’s upstream sector to comprehensively address both crude oil and natural gas exploration and production.

The signing ceremony took place at the headquarters of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Abuja, symbolizing a bold step in the Federal Government’s push to unlock Nigeria’s hydrocarbon potential under the reforms of the Petroleum Industry Act (PIA) 2021.

According to NNPC’s Group Chief Executive Officer, Engr. Bashir Bayo Ojulari, the deal represents “a unique milestone” for Nigeria’s energy sector. He noted that the PSC is the first with robust terms for natural gas, including incentives for monetising non-associated gas. Beyond being a contractual arrangement, Ojulari said, the deal signals Nigeria’s readiness to attract new global investment and reaffirms the commercial opportunities opened by the PIA.

The NNPC chief also underscored the company’s resolve to harness advanced technologies and partnerships in order to drive sustainable upstream operations, build on the successes of earlier deepwater projects, and strengthen energy security.

Engr. Gbenga Komolafe, Chief Executive of NUPRC, highlighted that the award of the two offshore blocks—spanning roughly 2,000 square kilometres—was the product of a transparent and competitive process driven by reforms under the PIA. He praised the consortium for its long-standing commitment to Nigeria’s upstream industry, pointing to earlier successes in assets such as Egina and Akpo.

TotalEnergies’ Nigeria chief, Mr. Matthieu Bouyer, echoed that sentiment, calling the deal “a reaffirmation of the company’s deep and enduring commitment to Nigeria,” where it has operated for more than six decades. He emphasized that this marks the first time in over a decade that an international oil company has secured new deepwater assets in Nigeria.

Sapetro’s Managing Director, Mr. Chukwuemeke Anagbogu, described the partnership as fully aligned with the government’s aspirations for resource efficiency, local content development, and inclusive growth. He stressed that the blocks hold the potential to boost reserves and ensure long-term production growth, delivering value not just to shareholders but also to Nigeria’s broader economy.

The PSC is designed with a comprehensive framework covering signature and production bonuses, cost recovery, profit-sharing, royalties, and taxes. It also includes clauses on gas utilisation to curb flaring, host community development obligations, and measures for decommissioning and environmental remediation—all in line with the PIA’s vision of sustainable resource management.

For Nigeria, the agreement stands as more than just another industry contract—it represents a strategic step toward balancing the dual imperatives of energy security and economic growth while signalling to the global community that its oil and gas sector remains open, competitive, and reform-driven.