ExxonMobil Commits $1 Billion to Boost Nigeria’s Usan Infill Project
In a move that underscores its long‑term presence in West Africa, ExxonMobil announced a $1 billion investment to expand the Usan Infill Project located in Oil Mining Lease (OML) 138 off the Nigerian coast. The pledge was made by Jagir Baxi, Managing Director of ExxonMobil’s Nigerian subsidiaries, during the 25th NOC Energy Week Conference and Exhibition held in Abuja in November 2024.
What the Investment Covers
The funds will be directed toward:
- Drilling additional development wells to increase reservoir contact.
- Installing new subsea infrastructure, including flowlines, umbilicals and risers.
- Upgrading existing production facilities to handle higher output volumes.
According to the company’s statement, the work is expected to lift crude output from the Usan field by roughly 15 % over the next three years, helping to offset natural decline rates observed in mature deepwater assets.
Strategic Fit Within ExxonMobil’s Nigeria Portfolio
ExxonMobil operates several deepwater blocks in the Niger Delta, including the prolific Erha and Akpo fields. The Usan Infill Project aligns with the corporation’s broader strategy to:
- Maintain and gradually grow production from existing offshore assets.
- Leverage technical expertise in subsea engineering to extend field life.
- Support Nigeria’s upstream reform agenda following the 2021 Petroleum Industry Act (PIA).
Baxi noted that the investment “reflects confidence in Nigeria’s improving investment environment and the ongoing reforms that are making the sector more competitive.”
Partners and Contractual Framework
OML 138 is operated under a Production Sharing Contract (PSC) with NNPC Limited. Besides ExxonMobil, the block’s equity holders include:
- Chevron Nigeria Limited
- TotalEnergies EP Nigeria
- Nexen Petroleum Nigeria Limited (a wholly owned subsidiary of CNOOC)
The PSC structure allows partners to share costs and revenues according to their respective stakes, while NNPC retains the government’s share of profit oil.
Anticipated Impact on Nigeria’s Oil Sector
Analysts project that the additional capital could:
- Generate an estimated $200 million in annual government revenue at current oil prices.
- Create up to 1,200 direct and indirect jobs during the construction and operational phases.
- Strengthen local content initiatives, as ExxonMobil has historically awarded a significant portion of contracts to Nigerian firms.
These outcomes support Nigeria’s goal of raising crude production to 2 million barrels per day by 2027, a target outlined in the nation’s National Oil and Gas Policy.
Regulatory Perspective
Oritsemeyiwa Eyesan, Managing Director of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), highlighted the significance of the announcement, noting that Esso Exploration and Production Nigeria – ExxonMobil’s local subsidiary – had not conducted any drilling activities in OML 138 since 2016. She stated:
“This renewed commitment signals a positive shift in operator activity and demonstrates confidence in the regulatory framework established by the PIA.”
The NUPRC expects the project to undergo standard environmental and safety reviews before work commences, ensuring compliance with both national and international standards.
Conclusion
ExxonMobil’s $1 billion pledge to the Usan Infill Project represents a tangible step toward revitalizing one of Nigeria’s key deepwater assets. By expanding drilling activities and upgrading subsea infrastructure, the investment aims to boost production, enhance government revenues, and create employment opportunities. The move also reflects growing confidence among international oil companies in Nigeria’s reformed upstream landscape, setting a precedent for future investments in the region’s offshore sector.
