The Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has formalized a production sharing contract (PSC) with TotalEnergies and South Atlantic Petroleum (Sapetro) for Petroleum Prospecting Licences (PPLs) 2000 and 2001 in the Niger Delta Basin.
The blocks, awarded during the 2024 licensing round, cover approximately 2,000 square kilometres. TotalEnergies will operate the fields with an 80 percent stake, while Sapetro holds 20 percent. The agreement includes a $10 million signature bonus, as well as production bonuses of two million and four million barrels—or their cash equivalent—upon reaching output milestones of 35 million and 100 million barrels.
Speaking at the signing ceremony in Abuja, NUPRC Chief Executive Officer Gbenga Komolafe described the PSC as a “new chapter” for Nigeria’s upstream sector. He highlighted that the contract provides clear guidance on cost recovery, profit oil sharing, royalties, and host community obligations, in line with the Petroleum Industry Act (PIA).
Komolafe noted that the PSC also addresses gas utilisation, environmental remediation, and decommissioning, emphasizing that the agreement sets the stage for expanded exploration, investment, and energy security in Nigeria. He praised President Bola Tinubu for reforms that encouraged the return of undeveloped assets for rebidding, making the country more attractive to investors.
Nigerian National Petroleum Company (NNPC) CEO Bayo Ojulari called the contract “unique,” highlighting it as the first deepwater PSC under the PIA to cover both crude oil and natural gas comprehensively. He added that the deal includes performance-based incentives and a 70 percent cost recovery limit, designed to balance returns for the contractor with value for the Federation.
TotalEnergies Country Chair Matthieu Bouyer reaffirmed the company’s long-term commitment to Nigeria, noting its 60-year presence and operations equivalent to 400,000 barrels of oil per day in 2024. Bouyer said the company intends to execute the work programme efficiently while leveraging its expertise to deliver low-cost, low-emission developments.
The PSC is expected to contribute significantly toward Nigeria’s goal of achieving 3 million barrels per day and enhancing the country’s attractiveness for upstream investments in Africa.
