The Federal Government of Nigeria has signed a landmark Production Sharing Contract (PSC) with TotalEnergies and South Atlantic Petroleum (Sapetro) for the Petroleum Prospecting Licences (PPLs) 2000 and 2001, awarded during the 2024 Licensing Round.
Under the agreement, TotalEnergies will hold about 80% interest as operator, while Sapetro will take the remaining stake. The two offshore blocks, covering approximately 2,000 square kilometres in the Niger Delta Basin, are considered high-potential deepwater assets.
The fiscal package for the PSC includes a $10 million signature bonus, as well as production bonuses of two million and four million barrels (or their cash equivalent), tied to output milestones of 35 million and 100 million barrels, respectively.
Speaking at the signing, Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), described the deal as “a new chapter” in Nigeria’s upstream industry:
“Today is not just about signing documents. It is about laying the foundation for new exploration and investment. This PSC signals the start of a committed work programme that will unlock untapped geological potential, expand our reserves, boost production, and strengthen Nigeria’s energy security.”
Komolafe added that the PSC provides clarity on cost recovery, profit oil sharing, royalties, host community obligations, gas utilisation, decommissioning, and environmental remediation in line with the Petroleum Industry Act (PIA).
This development follows NUPRC’s recent push to unlock an additional 810,000 barrels per day from Nigeria’s deepwater fields through its new cluster and nodal development strategy.
First Deepwater PSC Since PIA
Bayo Ojulari, Group CEO of the Nigerian National Petroleum Company Limited (NNPC), highlighted the uniqueness of the contract:
“It is the first deepwater PSC awarded since the enactment of the PIA and the first to comprehensively include terms for both crude oil and natural gas. The contract provides robust incentives, including a $10 million signature bonus, performance-tied production bonuses, and a 70% cost recovery limit, ensuring value for the Federation while guaranteeing returns for investors.”
Ojulari emphasised that the PSC introduces profit gas splits that encourage monetisation of non-associated gas — a priority area for Nigeria as it pushes towards cleaner energy development and enhanced energy security.
Matthieu Bouyer, Country Chair of TotalEnergies in Nigeria, reaffirmed the company’s long-term commitment:
“TotalEnergies has been present in Nigeria for over 60 years, employing more than 1,800 people and producing over 400,000 barrels of oil equivalent daily in 2024. We are eager to progress swiftly and responsibly with this work programme, delivering low-cost, low-emission developments that will create value for Nigeria and its people.”
Bouyer also highlighted the company’s downstream footprint of over 500 service stations across Nigeria as part of its broader contribution to the country’s energy economy.
The signing of this PSC is expected to advance Nigeria’s target of producing 3 million barrels per day while attracting fresh investment into the deepwater sector. It also reaffirms the Federal Government’s commitment to positioning Nigeria as the premier upstream investment destination in Africa.
