After nearly a decade without drilling a new deepwater well in Nigeria, ExxonMobil is making one of its strongest commitments to the country’s energy sector in recent years.
ExxonMobil and partners are investing $1 Billion in an Oil Project in Nigeria, through its affiliate Esso Exploration and Production Nigeria Limited (EEPNL) and its partners, will invest $1 billion in the Usan Infill Project, an offshore development expected to increase Nigeria’s crude oil production by approximately 40,000 barrels per day (bpd). The investment marks the company’s first major drilling campaign in Nigeria since 2016 and is being viewed by industry analysts as a vote of confidence in the country’s improving investment climate.
For a country seeking to rebuild oil output, stabilize foreign exchange earnings, and attract international capital after years of declining upstream investment, the announcement is significant.
A Return Years in the Making: Why ExxonMobil and partners are investing $1 Billion in an Oil Project in Nigeria.
Nigeria has long been one of Africa’s largest oil producers, but production has struggled over the past decade due to underinvestment, crude theft, pipeline vandalism, regulatory uncertainty, and delays in approving major projects.
Several international oil companies shifted focus away from onshore assets while prioritizing deepwater operations or divesting entirely.
ExxonMobil‘s latest announcement suggests that confidence is gradually returning.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Usan Infill Project is expected to revive drilling activity that has been dormant since ExxonMobil’s last campaign in 2016 while unlocking additional production from one of Nigeria’s important offshore assets.
What Is the Usan Infill Project?
The Usan field is located in Oil Mining Lease (OML) 138, approximately 70 kilometers offshore in the eastern Niger Delta.
Discovered in 2002 and brought into production in 2012, the field currently produces through a Floating Production Storage and Offloading (FPSO) vessel connected to dozens of subsea wells.
Rather than developing an entirely new field, the Usan Infill Project aims to identify and exploit additional pockets of recoverable oil within the existing field using advanced seismic imaging and new drilling technology.
According to ExxonMobil, high-quality seismic surveys completed in 2024 revealed new development opportunities that made the investment commercially attractive.
Industry experts often describe this type of investment as a “brownfield expansion”—lower risk and faster to execute than opening a brand-new field because much of the production infrastructure already exists.
What ExxonMobil Said
Speaking during Nigeria Oil and Gas (NOG) Energy Week in Abuja, Jagir Baxi, Chairman and Managing Director of ExxonMobil affiliates in Nigeria, said the project reflects the company’s long-term commitment to the country.
“The start of the Usan Infill Project reflects ExxonMobil’s continued focus on developing our deepwater portfolio in Nigeria. By applying advanced technology and leveraging our proven execution capabilities, we aim to safely and efficiently increase production and deliver value for our stakeholders while supporting Nigeria’s economic development.”
Baxi added that the project demonstrates the company’s confidence in Nigeria’s deepwater resources and acknowledged government efforts to improve the investment environment for offshore developments.
He also disclosed that the project is expected to generate approximately $1.2 billion in revenue for Nigeria over the next four years, with more than $300 million already committed by project partners.
The Federal Government’s Response
Nigeria’s upstream regulator described the investment as an important milestone in efforts to revive deepwater production.
During the signing ceremony, Oritsemeyiwa Eyesan, Chief Executive of the NUPRC, highlighted the significance of the project.
“One billion dollars invested to unlock 40,000 barrels of oil. This initiative carries particular importance as it aligns with the commission’s objective to revitalise activity within Nigeria’s deepwater assets.”
Eyesan noted that ExxonMobil had not drilled in Nigeria’s deepwater acreage since 2016, making the return particularly symbolic.
“With Esso’s last drilling operation dating back to 2016, the resumption of drilling signals renewed potential and value in our deepwater acreage.”
She also emphasized that many of Nigeria’s offshore assets are currently producing below capacity, making new investment critical to achieving the country’s production targets.
Why This Matters for Nigeria
Oil remains Nigeria’s largest source of export earnings and one of the government’s biggest revenue generators.
Although the country has struggled in recent years to meet its production quotas, policymakers have been working to reverse the trend through regulatory reforms, implementation of the Petroleum Industry Act, and efforts to improve investor confidence.
An additional 40,000 barrels per day may appear modest compared with Nigeria’s historical production levels, but it represents meaningful incremental output from an existing asset and could contribute to stronger export earnings if production targets are achieved.
Higher production could also strengthen government finances through royalties, taxes, and profit-sharing arrangements while supporting foreign exchange inflows.
Why ExxonMobil Is Investing Now
Several factors appear to have influenced the company’s decision.
First, improvements in the regulatory environment have reduced uncertainty surrounding deepwater investments.
Second, the 2022 renewal of the OML 138 lease provided a longer investment horizon for the asset.
Third, new seismic data identified commercially attractive drilling opportunities that were not previously available.
Finally, stronger global demand for secure energy supplies continues to support investment in competitive offshore projects.
A Broader Signal to Investors
The announcement is significant beyond ExxonMobil itself.
International oil companies have been selective in allocating capital over the past decade, often favoring jurisdictions with stable fiscal terms and predictable regulation.
A billion-dollar commitment from one of the world’s largest energy companies sends a positive signal to other investors evaluating opportunities in Nigeria’s upstream sector.
It may also encourage additional investment in related projects, including offshore services, engineering, marine logistics, fabrication, and local content development.
Economic Ripple Effects
Large offshore developments generate activity far beyond oil production.
The Usan Infill Project is expected to create demand across:
- Engineering and project management.
- Offshore drilling contractors.
- Marine transport and logistics.
- Equipment manufacturing and maintenance.
- Environmental and technical consulting.
- Nigerian suppliers participating under local-content requirements.
Such projects can support thousands of direct and indirect jobs throughout the supply chain over their lifecycle.
Challenges Still Remain
Despite the optimism, challenges persist.
Nigeria continues to face issues including infrastructure constraints, security concerns in parts of the Niger Delta, financing pressures, and the need to maintain a competitive investment environment amid global competition for capital.
Deepwater projects also require disciplined execution because cost overruns and operational delays can erode returns.
The success of the Usan Infill Project will therefore depend not only on geology but also on efficient project delivery, regulatory consistency, and collaboration between operators, government agencies, and service providers.
Looking Ahead
ExxonMobil expects first production from the project within about 18 months, with the investment forming part of its broader deepwater strategy in Nigeria.
If delivered on schedule, the project could become one of the most important additions to Nigeria’s offshore production in recent years and reinforce the country’s position as a key destination for deepwater investment in Africa.
For policymakers, the announcement is an early indication that recent reforms may be translating into renewed investor confidence. For businesses across Nigeria’s energy value chain, it represents fresh opportunities for contracts, employment, and economic activity. And for the wider economy, it offers cautious optimism that sustained investment—not just higher oil prices—can help strengthen growth in one of Nigeria’s most strategically important industries.
