The Federal Government of Nigeria has expressed enthusiasm over ExxonMobil’s plans to invest $10 billion in Nigeria’s deep-water oil operations. This development comes at a crucial time for Nigeria’s energy sector, which is undergoing significant shifts as international oil companies (IOCs) increasingly pivot from onshore to offshore ventures due to security, operational, and regulatory challenges.
The announcement was made by Vice President Kashim Shettima during a meeting with ExxonMobil executives on the sidelines of the ongoing 79th United Nations General Assembly in New York, United States. Shettima said that the proposed investment aligns with President Bola Tinubu’s economic reforms and investment-friendly policies aimed at revitalizing the Nigerian oil sector.
“This potential investment by ExxonMobil aligns perfectly with the President’s vision for a more investment-friendly Nigeria. We are committed to creating an enabling environment for such transformative projects,” Shettima stated.
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ExxonMobil is one of several IOCs that have shifted focus from Nigeria’s onshore operations, marked by persistent security threats, regulatory uncertainties, and environmental concerns, to the more stable and potentially lucrative deep-water oil fields in the Niger Delta. The deep-water pivot is seen as a safer and more profitable venture, underscoring a broader industry trend as oil majors seek to de-risk their portfolios and streamline operations.
Shane Harris, Chairman and Managing Director of ExxonMobil Affiliates in Nigeria, reaffirmed the company’s long-term commitment to Nigeria, spotlighting the Owo project—a major subsea tie-back—which represents a significant portion of the proposed $10 billion investment. This ambitious project aims to expand deep-water exploration and production capabilities, marking a new chapter in ExxonMobil’s operations in Nigeria.
“Our commitment to Nigeria remains unwavering. As we celebrate 70 years of oil production and 8 billion barrels produced, we’re not retreating but refocusing our investments on deep-water opportunities,” Harris said. “We’re working closely with the President’s office and the Special Adviser to the President to secure favorable fiscal arrangements that will make this significant investment possible.”
ExxonMobil plans to inject $1 billion annually into maintenance operations and an additional $1.5 billion aimed at boosting production by 50,000 barrels per day over the next few years. This strategy aligns with the company’s broader objective to enhance production efficiency and explore untapped deep-water resources in Nigeria’s oil-rich Niger Delta region.
Shifting Tides: IOCs Exit Onshore, Embrace Offshore Ventures
ExxonMobil’s deep-water investment is part of a broader trend among IOCs, who are increasingly divesting from onshore assets plagued by operational challenges. In recent years, Nigeria’s onshore oil sector has been marred by issues such as oil theft, pipeline vandalism, and community conflicts, prompting companies to reconsider their onshore stakes.
In addition to ExxonMobil, other oil majors like Shell and TotalEnergies have also adopted divestment strategies, focusing on offshore operations while offloading onshore assets. Earlier this year, Shell reached an agreement to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion, pending government approval. The consortium, named Renaissance, includes ND Western, Aradel Energy, First E&P, Waltersmith, and Petrolin. Shell’s divestment plan includes additional payments of up to $1.1 billion contingent upon meeting certain conditions.
Similarly, TotalEnergies announced plans to divest its minority stake in a significant Nigerian onshore oil joint venture, following Shell’s exit strategy. These moves reflect a growing consensus among IOCs that offshore operations offer a more stable and less contentious environment for oil production.
In parallel to its offshore investments, ExxonMobil is also in the process of divesting its onshore assets. The company’s $1.2 billion deal with Seplat Energy, which has been in negotiation since 2022, recently gained momentum following President Tinubu’s intervention. The move is part of a broader effort to resolve regulatory hurdles and streamline the divestment process, further solidifying ExxonMobil’s strategic shift away from Nigeria’s onshore segment.
These divestments underscore a significant restructuring within Nigeria’s oil and gas sector, where onshore assets are increasingly transferred to indigenous companies that are better positioned to manage local challenges.
ExxonMobil’s deep-water investment is being viewed by Nigerian officials as a vote of confidence in the country’s economic reforms and policy adjustments aimed at attracting foreign investment.