Nigeria’s crude oil production is set to receive a significant boost as ExxonMobil resumes deepwater drilling operations with a $1 billion investment in the Usan field.
The project is expected to increase Nigeria’s oil production by approximately 40,000 barrels per day (bpd) once completed, supporting the Federal Government’s drive to raise crude output, attract fresh upstream investment and strengthen foreign exchange earnings.
ExxonMobil, through its Nigerian affiliate, Esso Exploration and Production Nigeria (Offshore East) Limited, has commenced the Usan Infill Project in Oil Mining Lease (OML) 138.
The development involves drilling additional wells around the existing Usan offshore production facilities to unlock previously untapped reserves and maximise output from existing infrastructure.
The company expects the project to deliver first oil within 18 months with production routed through the existing Usan Floating Production, Storage and Offloading (FPSO) facility.
By leveraging existing infrastructure, the project is expected to achieve lower development costs and a faster production timeline than a greenfield offshore development.
Funding for the project will be provided by Esso and its partners in OML 138, including Chevron Nigeria Limited, TotalEnergies EP Nigeria Limited, and Nexen Petroleum Nigeria Limited, a subsidiary of China’s CNOOC, under a Production Sharing Contract with the Nigerian National Petroleum Company Limited (NNPC Ltd.).
The renewed investment represents one of the most significant commitments by an international oil company to Nigeria’s upstream sector in recent years.
For much of the past decade, major energy companies reduced capital expenditure in Nigeria amid concerns over oil theft, pipeline vandalism, regulatory uncertainty and delayed investment decisions.
However, while several international operators have divested from onshore and shallow-water assets, deepwater fields have continued to attract investment because of their lower security risks, larger reserves and stronger commercial economics.
The Usan Infill Project also reflects growing confidence in Nigeria’s regulatory environment following the implementation of the Petroleum Industry Act (PIA), which introduced reforms aimed at improving fiscal stability and encouraging long-term investment in the upstream sector.
The Usan field, located offshore in the Niger Delta, has been producing crude oil since 2012. Rather than developing a new offshore asset, the latest investment focuses on expanding production from an established field through additional drilling opportunities identified after advanced seismic surveys conducted in 2024.
The investment comes as Nigeria intensifies efforts to restore oil production after years of underperformance. Authorities have introduced new licensing rounds, strengthened regulatory oversight and implemented measures to improve investment conditions in a bid to increase crude output and enhance the country’s position in the global energy market.
For Nigeria, the additional 40,000 bpd expected from the Usan project could contribute to higher export volumes, improved government revenue and stronger foreign exchange inflows, while reinforcing the country’s ambition to revive upstream activity through renewed participation by international energy companies.