Nigeria’s offshore oil industry is witnessing a major revival as international oil companies (IOCs) shift their attention from troubled onshore assets to deepwater exploration, committing billions of dollars to new projects. Leading the renewed investment drive is ExxonMobil, which has announced a $1 billion deepwater infill project at the Usan oil field, marking its return to drilling in the area after a decade. The project is expected to add 40,000 barrels of oil per day, reinforcing confidence in Nigeria’s offshore potential and signaling a fresh chapter for the country’s oil and gas sector.
The renewed focus follows years of divestments by global energy giants, including ExxonMobil, Shell, Eni, and Equinor, which sold off several onshore and shallow-water assets due to persistent oil theft, pipeline vandalism, community conflicts, and regulatory challenges. With existing offshore infrastructure already in place, companies now see deepwater developments as a faster, safer, and more profitable alternative. ExxonMobil says more than $300 million has already been committed by partners in the Usan project, which is expected to generate about $1.2 billion in government revenue over the next four years.
Industry experts believe the investment wave reflects growing confidence in Nigeria’s offshore reserves and recent reforms aimed at improving the country’s investment climate. Former Nigerian National Petroleum Company (NNPC) board member Abdullah Bukar described Nigeria’s deepwater sector as one of the most attractive destinations for both oil and gas investment, noting that while many onshore fields are reaching maturity, offshore reserves remain largely untapped. Analysts at Wood Mackenzie also describe Nigeria’s deepwater assets as highly valuable, despite production declining from about 800,000 barrels per day in 2016 to less than 500,000 barrels per day today.
ExxonMobil’s Usan project is only one part of a broader resurgence across Nigeria’s offshore industry. Shell has already approved the $5 billion Bonga North development, while other major projects—including Bonga Southwest-Aparo, Preowei, Zabazaba-Etan, Nsiko, Owowo, and Bosi—are progressing toward investment decisions. The federal government, through the Petroleum Industry Act (PIA) and a series of investment-focused fiscal incentives introduced under President Bola Tinubu’s administration, has played a key role in restoring investor confidence. Tax incentives tied to new offshore developments are expected to accelerate final investment decisions before the end of the decade.
If these projects move forward as planned, they could transform Nigeria’s energy landscape by adding an estimated 700,000 barrels of oil per day alongside significant natural gas production, helping the country work toward its target of producing 3 million barrels per day by 2030. Beyond boosting government revenue, the offshore revival is expected to create employment opportunities, revive local technical expertise, and strengthen businesses supporting the oil and gas value chain. For Nigeria, the return of global oil giants represents more than renewed drilling—it signals renewed confidence in the country’s long-term energy future.
source: theafricareport
