The location has an almost symbolic quality. At the Nigeria Oil and Gas Energy Week conference in Abuja on July 8, ExxonMobil’s Nigeria Managing Director Jagir Baxi stood up to announce a $1 billion final investment decision on the Usan deepwater field. The audience knew this was something they hadn’t heard in a long time. The last time the company drilled in Nigeria was in 2016. After almost ten years of quiet, this.
The Usan field is located in the eastern Niger Delta, about 43 miles off the coast of Nigeria, beneath water depths that cause even seasoned petroleum engineers to hesitate. With a network of subsea manifolds and wells connecting it to a floating production, storage, and offloading vessel, it has been in production since 2012. However, it coasted along without new drilling for years, while investment decisions stalled and the Nigerian oil industry as a whole struggled with security issues, unclear regulations, and sometimes astounding levels of crude theft.
Within 18 months of starting production, the $1 billion investment from ExxonMobil Nigeria, which is designed as an infill drilling project aimed at reservoir pockets found through seismic studies finished in 2024, is anticipated to add 40,000 barrels of oil per day. That is a significant figure for a nation that has been having difficulty maintaining production above 1.5 million barrels per day, well below its declared goal of surpassing 2 million. Under a production-sharing agreement with NNPC Ltd., Esso Exploration and Production Nigeria and its partners, Chevron, TotalEnergies, and Nexen, a division of China’s CNOOC, jointly fund the project.
The context surrounding this event is what makes it feel truly significant rather than just another industry press release. For years, foreign oil companies have been pulling out of Nigeria’s shallow-water and onshore acreage. The economics were hard to defend due to pipeline vandalism, security threats, and years of unclear policy. Assets were discreetly sold by Shell, Eni, and others. ExxonMobil sold off a number of its shallow-water holdings. For a while, the story was that the majors were gradually leaving.
The exception was always Deepwater. Offshore blocks like OML 138 remained commercially appealing despite the complexity of onshore Nigeria because they were remote, technically challenging, and more difficult to steal from. Additionally, it appears that Nigeria’s Petroleum Industry Act, which was passed into law in 2021 following years of legislative work, has actually changed the investment landscape. Although it’s still unclear how much of this momentum is due to the PIA and how much is just an increase in the world’s energy demand, the two seem to be supporting one another.
At the project launch, NUPRC CEO Oritsemyiwa Eyesan stated unequivocally: “Many of our deepwater assets are operating with low capacity today.” Not much has changed in the last ten years. She was correct. The Usan FPSO had idle capacity. It’s difficult to ignore the significance of the moment when Nigerian regulators and ExxonMobil executives unite to announce a billion-dollar commitment to change that.
The aspirations go beyond Usan. ExxonMobil informed Nigerian regulators in April about plans for a number of other deepwater projects, such as the Owowo development, which is estimated to be worth $7 to $8 billion and has about one billion barrels of developed resources. A final investment decision could be made as early as next year. If a new FPSO and pipeline development move forward, the Bosi field, which is next to Erha, could draw up to $16 billion. Even taking into consideration the fact that plans are still plans at this point, the scope of the discussion is noteworthy.
This kind of momentum is what Nigeria needs. For years, output has lagged, and a government heavily reliant on oil revenues has been under financial strain. By late 2027, when first production from the infill project is anticipated to flow, it will likely be clearer whether this billion-dollar wager at Usan marks the start of a larger deepwater revival or continues to be a promising but isolated data point. It appears to be sincere re-engagement for the time being. It appears that ExxonMobil is not merely going back to Nigeria. Earlier this year, one of its own executives described it as “getting back in business.”
