The Federal Government has entered into a new Production Sharing Contract (PSC) with French energy giant TotalEnergies and its partner, South Atlantic Petroleum (Sapetro), for two deepwater blocks in the Niger Delta Basin.

The agreement, brokered through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), covers Petroleum Prospecting Licences (PPLs) 2000 and 2001, awarded during the 2024 licensing round. Together, the blocks span nearly 2,000 square kilometres. TotalEnergies will operate the assets with an 80 per cent stake, while Sapetro holds the remaining 20 per cent.

Under the terms, the consortium will pay a $10 million signature bonus and commit to production bonuses at key milestones — two million barrels at 35 million barrels of output and four million barrels at 100 million barrels. The deal also sets clear guidelines on cost recovery, profit oil sharing, royalties, gas utilisation, host community obligations, and environmental standards in line with the Petroleum Industry Act (PIA).

Speaking at the signing ceremony in Abuja, NUPRC Chief Executive, Gbenga Komolafe, described the contract as “a new chapter” for Nigeria’s upstream sector. He credited recent reforms by President Bola Tinubu — including fiscal incentives, streamlined contract timelines, and improved local content policies — for reviving investor confidence.

“This signing is more than a formality. It represents the foundation for fresh exploration, expanded reserves, and stronger energy security. It also signals to the world that Nigeria is ready to be the number one investment destination for upstream oil and gas in Africa,” Komolafe stated.

He further explained that the Commission had taken a pragmatic approach in the 2024 licensing round by lowering signature bonuses to align with global best practices. This, he said, encouraged investor participation at a time when attracting capital to deepwater projects has become increasingly competitive worldwide.

The Group Chief Executive of NNPC Limited, Bayo Ojulari, also hailed the deal as groundbreaking. According to him, it is the first deepwater PSC concluded since the enactment of the PIA and the first to integrate terms for both crude oil and natural gas.

“This PSC is designed with robust fiscal terms — including profit gas incentives that will unlock Nigeria’s vast non-associated gas resources. It is structured to deliver value to the Federation while ensuring attractive returns for contractors. If properly implemented, it will help Nigeria move closer to the target of producing three million barrels per day,” Ojulari said.

On his part, the Country Chair of TotalEnergies, Matthieu Bouyer, reaffirmed the company’s long-standing commitment to Nigeria, where it has operated for over six decades. He highlighted that the company currently produces more than 400,000 barrels of oil equivalent daily in the country and employs over 1,800 people.

“We are committed to advancing these new blocks responsibly, leveraging our global expertise to deliver low-cost, low-emission projects. This agreement represents another opportunity to create value for Nigeria and all stakeholders,” Bouyer added.

The signing is expected to further boost confidence in Nigeria’s oil and gas industry, as the government intensifies efforts to attract investment, increase reserves, and scale up production.