ExxonMobil targets $1.5 billion deepwater investment in Nigeria

ExxonMobil is raring to complete the process that will formalise a new $1.5 billion deepwater investment in Nigeria, and so has arranged for a final investment decision (FID) to be made at most by September.

The financial commitment to the project, to be developed in the Usan deepwater oilfield to the east of the Niger Delta, will run from the second quarter of the year through 2027 as oil majors operating in Nigeria continue to drift offshore after offloading onshore assets.

ExxonMobil, which completed sale of its onshore and shallow water business to Seplat for $1.3 billion last year, already has a 30 per cent interest in the field. It holds the stake through an affiliate, Esso Exploration and Production Nigeria (Offshore East).

“The company proposed FID in late Q3 2025 subject to final Field Development Plan approval as well as internal and Partner funding approvals,” the Nigerian Upstream Regulatory Commission said in a Facebook post late Tuesday.

“This is in addition to investment targeted at the accelerated development of the Owowo, Erha deepwater oil fields, amongst others,” it added, citing talks by Shane Harris, Exxon Mobil Nigeria’s CEO, with Gbenga Komolafe the regulator’s chief.

Texas-based ExxonMobil is taking its chance at 10 strategic projects this year to help boost earnings by more than $3 billion in 2016 after Q1 net profit slid by 6.2 per cent year on year.

Seeking out exploration and drilling opportunities to expand income streams is now an urgency for the supermajor as the global oil industry reels from the turmoil of a volatile market grappling with a supply build-up and shocks from Donald Trump’s tariff war.

Oil prices this month fell to a four-year low on aspirations by the OPEC+ to roll back production cuts, which will increase quotas for members.

The US Energy Information Administration revised its 2025 oil price forecast for Brent crude, the international pricing benchmark used by Nigeria, 3 per cent down to $65.9 on Wednesday, citing supply-side pressure.

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ExxonMobil’s quest to increase production is at one with Nigeria’s aspiration to ramp up output to more than 2 million bpd this year after Africa’s biggest oil producer hit a ten-year low in 2023.

Concerted security and surveillance efforts directed at oil theft and destruction of pipeline infrastructures by vandals are paying off, helping production levels to pick up during last year.

That said, pockets of explosion and sabotage at oil installations were reported in recent times, setting the stage for President Bola Tinubu’s declaration of emergency rule on oil-rich Rivers State in March.

The relative increase in output is fuelling a refining push at home, especially at the level of small-scale processing, which saw at least five licences for different phases of development handed out to new modular refineries in the quarter to March.

Four state-owned and six licensed private refineries comprising Dangote Refinery, Duport Midstream Company, AIPCC Energy, Waltersmith, OPAC and Edo Refining and Petrochemicals Company currently account for the country’s current 1.1 million bpd refining capacity, Farouk Ahmed, head of Nigeria’s midstream and downstream regulator said in April.

Deepwater boom

Investments by oil majors in onshore and shallow water operations are drying up fast in Nigeria, where big guns like ExxonMobil, Eni, TotalEnergies, Equinor and lately Shell have divested stakes.

Local energy companies that are eager to scale are stepping in to fill the void.

The multinationals have blamed the exodus on a litany of litigations from communities, whose environment, livelihoods and health are at the receiving end of the devastating impact of oil & gas activities.

In several instances, they have had to part with substantial portions of their revenue in legal costs to compensate for the damage.

One recent example is the case of Shell which, apart from direct friction with Niger Delta communities over conflicting views on the shape exit should take, faced a backlash from environmental campaigners and the public.

Decommissioning procedures require that companies disassemble old infrastructures and undertake a clean-up and restoration of their operating environment, an obligation that would come at a high cost to Shell, which had operated in the area for 87 years.

A Financial Times report in December revealed that Shell gave authorities in Nigeria the precondition of approving its bid to sell its Niger Delta assets in exchange for new investments in Nigeria’s deep waters before the company was permitted to quit.

Last September, Vice President Kashim Shettima bared plans by ExxonMobil to commit $10 billion to the development of another deepwater project in Owo, Ondo State.

READ ALSO: ExxonMobil unveils $10 billion investment plan in Nigeria – Presidency

The attraction for international oil companies (IOCs) in deepwater has been the notion that offshore activities have relatively low risks.

Unlike onshore operations, the threats here, which tend to have remote effects on communities, are often overlooked.

Not proactively managing them could worsen climate change and set Nigeria back in its pledge to cut greenhouse gas emissions unconditionally by 20 per cent come 2030.

Last year, S&P Global observed in a study on the greenhouse gas emissions intensity of offshore Nigeria production for 2023 that the overall emissions intensity for the country is nearly double that of the UK and thrice that of offshore Brazil.

“The largest 20 assets by production contributed to 90% of production and 80% of emissions, a pattern similar to that seen in offshore Brazil,” the report stated.

“Among the top-20 producing assets, IOCs operated 18, and seven of the eight deepwater assets were in this top-20 group,” it further said.