• Shell, ExxonMobil, Eni advance deepwater development programmes

Fiscal incentives for petroleum investments introduced by the administration of President Bola Ahmed Tinubu contributed to unlocking over $50 billion commitments from major international oil companies after nearly two decades of investment stagnation.

Chairman of AA Holdings, Mr. Austin Avuru, says that the fresh incentives have repositioned Nigeria as one of the world’s most attractive destinations for deepwater oil and gas investment as government intensifies efforts to boost output in the face of thinning funding opportunities for fossil energy projects.

Mr. Avuru, who delivered a lecture at the 2026 masterclass organised by the Nigerian Council of the Society of Petroleum Engineers (SPE) in Lagos, examined the factors that shape investment decisions in the global petroleum industry and asserted that while Nigeria’s hydrocarbon endowment remains among the best globally, resource abundance alone is no longer sufficient to attract capital in an increasingly competitive industry.

He made it clear that governments of resource rich nations must now create commercially attractive fiscal regimes and stable operating environments that are capable of delivering competitive returns to investors.

Mr Avuru, a respected industry geologist and one of Nigeria’s foremost petroleum executives, drew on decades of industry experience to explain the changing investment landscape.

Mr Austin Avuru is a former executive of the defunct Nigerian National Petroleum Corporation (NNPC), founding Managing Director of Platform Petroleum, founding Managing Director of Seplat Energy Plc, lead investor in Pillar Oil and current Chairman of AA Holdings. He also currently serves on the board of the Nigerian National Petroleum Company (NNPC) Limited and previously led the Nigerian Association of Petroleum Explorationists as chairman.

He noted that the competition for upstream investment has intensified as countries race to monetise hydrocarbon resources before the global energy transition narrows future opportunities for fossil fuel development.

According to him, a combination of global energy transition policies, shrinking appetite among international financial institutions to fund fossil fuel projects, the declining number of multinational companies with sufficient balance sheets to self-finance large developments and the emergence of new petroleum provinces have fundamentally altered the destination of upstream investments.

These developments, he explained, have forced oil-producing nations into fierce competition for limited global capital, making fiscal competitiveness a decisive factor in investment decisions.

He said Nigeria’s deepwater sector suffered almost twenty years of stalled investment after disagreements between government and international oil companies over fiscal terms governing offshore developments. Although the enactment of the Petroleum Industry Act (PIA) was widely welcomed as a landmark reform, he observed that several commercial concerns raised by investors remained unresolved, preventing a number of major projects from progressing to Final Investment Decisions (FIDs).

He credited the breakthrough to the Executive Orders introduced by President Tinubu, explaining that the incentives contained in the presidential directives addressed many of the commercial issues that had diverted investment capital away from Nigeria’s offshore sector since 2005.

Beyond improving project economics, the Executive Orders encouraged cost-efficient development models, innovative engineering solutions and accelerated project execution, while supporting the Federal Government’s objective of rapidly increasing crude oil production.

To illustrate the impact of the reforms, Avuru pointed to a series of investment commitments announced by ExxonMobil, Shell and Eni, which together represent more than $50 billion in planned spending across Nigeria’s deepwater petroleum province.

He described these commitments as strong evidence that investor confidence has returned following the government’s fiscal interventions.

Among the most significant is ExxonMobil’s programme, which envisages investments exceeding $25 billion across a portfolio of deepwater developments and enhanced oil recovery projects.

The company is advancing development of the Usan, Owowo and Bosi fields while simultaneously extending the productive life of existing assets.

ExxonMobil’s Senior Vice President for Deepwater, Hunter Farris, disclosed the company’s plans during a visit to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), where discussions centred on expanding its deep offshore footprint.

According to Farris, the planned investments have been made possible by improvements in Nigeria’s business environment and the company’s renewed long-term confidence in the country.

Industry reports cited by Avuru further indicate that policy reforms, including President Tinubu’s Executive Order 9, have significantly reduced operational bottlenecks in deepwater operations, helping to restore investor confidence.

The company’s flagship Erha field, which recently marked two decades of production, has secured an extension of its Production Sharing Contract to 2042, creating the foundation for life-extension projects designed to restore the Erha Floating Production Storage and Offloading (FPSO) facility to peak performance.

Beyond Erha, ExxonMobil is pursuing enhanced oil recovery investments at the Usan field while preparing for full-scale development of the Owowo discovery, estimated to contain about one billion barrels of recoverable resources.

The Owowo project alone is expected to require between $7 billion and $8 billion in capital expenditure and could produce approximately 180,000 barrels of liquids per day through a dedicated FPSO if development proceeds as planned.

Avuru also highlighted the proposed development of the Bosi oil and gas field, located near Erha, where investments could range between $15 billion and $16 billion, particularly if the project incorporates a new FPSO and associated export infrastructure.

According to ExxonMobil, the combination of Erha life-extension projects, Usan optimisation, Owowo development and Bosi represents a renewed phase of growth in Nigeria’s offshore petroleum industry.

Shell’s renewed commitment to Nigeria’s offshore sector provides another example of the changing investment climate highlighted by Avuru. Contrary to widespread speculation that the company intended to scale back its Nigerian presence, Shell has approved the Bonga North project while continuing to advance the long-delayed Bonga South West development.

Bonga North is expected to deliver peak production of about 110,000 barrels per day, while first oil is targeted before the end of the decade.

Government incentives are also helping accelerate progress toward a Final Investment Decision on Bonga South West after years of delay.

Shell and its partners have earmarked approximately $20 billion for the combined development of the Bonga South West and Aparo fields, with roughly half of the expenditure expected to be capital investment and the balance covering operating and sundry costs within Nigeria.

Shell Chief Executive Officer, Wael Sawan, publicly acknowledged the contribution of President Tinubu’s reforms, telling the President that the improved investment climate had transformed Shell’s outlook towards Nigeria.

“We are very keen to invest in Nigeria. But I’ll say this hasn’t always been the case. Your leadership has created an investment climate over the last few years that has propelled Shell to invest in Nigeria,” Sawan said.

Bonga South West alone is estimated to contain 820 million barrels of recoverable reserves with projected peak production of about 220,000 barrels per day.

Italian energy major Eni has equally strengthened the growing investment momentum with plans to invest about $10.3 billion in the development of the Zabazaba and Etan fields in the deepwater OPL 245 area.

Avuru noted that President Tinubu’s approval converting the former Oil Prospecting Licence 245 into two Petroleum Mining Leases—PML 102 and PML 103—and two Petroleum Prospecting Licences removed a major regulatory hurdle, paving the way for accelerated project development.

Eni said the restructuring of the licence framework strengthens its long-term partnership with Nigeria while unlocking significant offshore hydrocarbon resources.

The Zabazaba-Etan project is based on approximately 500 million barrels of reserves and is expected to utilise a 150,000-barrel-per-day FPSO, with associated gas production of about 200 million standard cubic feet per day to be exported through Nigeria LNG Limited.

The company also indicated that the newly created exploration licences possess significant development potential that could be integrated with future Zabazaba-Etan production infrastructure.

Mr Avuru stated that the significance of the investment commitments extends beyond their headline value. The renewed investments demonstrate that capital follows commercial certainty in the new era of petroleum industry.

Nigeria’s ability to attract more than $50 billion in fresh deepwater investment after years of stagnation also reflects the success of fiscal reforms aimed at restoring investor confidence, improving project economics and making the country’s offshore sector globally competitive.

Mr Avuru argued that if the announced projects are executed on schedule, they will not only reverse declining crude oil production but also strengthen government revenues, expand local content opportunities and reinforce Nigeria’s position as one of the world’s leading deepwater petroleum provinces.