Nigeria’s Offshore Revival: How Abuja is Drawing Eni, Shell, and TotalEnergies Back to the Deep
Beneath the Atlantic, off Nigeria’s coastline, sit reserves that international oil companies have circled for years without committing to. That hesitation appears to be easing. Eni, Shell and TotalEnergies are
Off Nigeria's Atlantic coastline, vast oil reserves have kept international oil companies at bay for years. However, recent tax incentives from Abuja seem to be enticing companies to reconsider their stance. Eni, Shell, and TotalEnergies are reportedly re-engaging with Nigeria's deep offshore fields, as new measures under President Bola Tinubu aim to make the country's deep offshore fields more appealing compared to other global destinations.
The cornerstone of this strategy is a Deep Offshore Oil and Gas Projects Incentives framework, introduced in August, replacing lengthy project negotiations with clear, investment-linked rules. The government believes this framework could attract up to $50 billion in fresh offshore capital.
Shell's Bonga South-West Aparo project exemplifies the impact of this new framework. The NNPC and its OML 118 partners, including Shell, have recently revised production-sharing terms, bringing the project closer to a final investment decision worth between $15 billion and $21 billion. Eni's involvement also demonstrates the framework's potential.
In March, Nigerian President Tinubu met with Eni's CEO, Claudio Descalzi, resolving a long-standing dispute over OPL 245. This led to the conversion of the block into new development and exploration licenses. Meanwhile, TotalEnergies focuses on gas rather than crude, collaborating with Nigerian independent producer Amni International on the Ima gas field.
Once the negotiations with their partner conclude, the company expects to make a final investment decision.
While the potential figures are significant, skepticism remains. Nigeria has announced incentive frameworks before, without seeing them translate into oil production. The National Petroleum Regulatory Commission's prediction of an additional million barrels a day depends on several conditions such as approvals, financing, and construction, all of which need to fall into place over several years.
What has changed now is the renewed interest from three major global players with global alternatives. Whether this renewed attention results in steel and production will depend on further decisions from Abuja.
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