Nigeria has signed its first Production Sharing Contract (PSC) that covers both crude oil and natural gas, awarding two deepwater blocks to a consortium of TotalEnergies and South Atlantic Petroleum (Sapetro), in what officials said marks a turning point for the country’s upstream sector.
The deal, sealed in Abuja on Monday between the Nigerian National Petroleum Company (NNPC) Ltd and the TotalEnergies–Sapetro consortium, applies to Petroleum Prospecting Licences (PPLs) 2000 and 2001.
According to the NNPC, it is the first such agreement to include robust gas terms, including profit gas incentives aimed at monetising non-associated gas, under the framework of the Petroleum Industry Act (PIA) 2021.
NNPC’s Group Chief Executive Officer, Bashir Bayo Ojulari, said the contract was “a powerful testament” to reforms introduced by the PIA and proof that Nigeria was “poised for business” after years of investment hesitancy in the oil and gas sector.
TotalEnergies, which holds 80% of the blocks, described the award as the first time in more than a decade that an international oil company has secured new deepwater acreage in Nigeria. Its local partner Sapetro holds the remaining 20%.
Regulator NUPRC said the two blocks, covering roughly 2,000 square kilometres, were awarded through a transparent, competitive process. Chief Executive Gbenga Komolafe said the PSC terms include work commitments, production bonuses, cost recovery and profit-sharing rules, as well as obligations on gas utilisation, decommissioning, host community development and environmental remediation.
TotalEnergies’ Nigeria chief Matthieu Bouyer said the signing reaffirmed the company’s “deep and enduring commitment” to Nigeria, where it has operated for more than 60 years. Sapetro’s Managing Director, Chukwuemeke Anagbogu, said the deal would boost reserves, secure long-term production growth and support local content.
The contract is seen as a milestone in Nigeria’s effort to unlock its vast offshore resources, strengthen energy security and reduce routine gas flaring while attracting foreign capital back into the sector.
