Abuja: The Federal Government has announced plans to boost crude oil production by approximately 810,000 barrels per day (bpd) from Nigeria’s deepwater oil fields through a new cluster and nodal development initiative. Mr. Gbenga Komolafe, Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), revealed this development at a stakeholders’ workshop on deep/shallow water cluster/nodal development in Abuja.
According to News Agency of Nigeria, the initiative is spearheaded by NUPRC as part of a larger strategy to rejuvenate Nigeria’s offshore oil production, which has been declining in recent years. The workshop, themed ‘Harnessing the potential of deep/shallow water, oil and gas accumulations through clusters/nodal development in Nigeria,’ brought together industry stakeholders to discuss this ambitious plan.
Komolafe, represented by Mr. Babajide Fashina, Executive Commissioner of Economic Regulation and Strategic Planning at NUPRC, stated that if fully implemented, the additional output could increase Nigeria’s total monthly crude production by 2.51 million bpd, including condensates. This increase would significantly enhance the country’s revenue generation capacity and improve compliance with OPEC+ production quotas. The initiative was conceived in response to the industry’s declining offshore output and the necessity to harness untapped reserves for sustainable growth.
At the peak of Nigeria’s deepwater oil production in 2016, the country produced about 800,000 bpd, a figure that has since plummeted to below 500,000 bpd. Komolafe explained that the commission’s data indicates over 5.13 billion barrels of oil and 13.53 trillion cubic feet (tcf) of gas remain untapped in the deepwater acreages. Of this, 3.59 billion barrels are classified under 2P reserves, meaning they are proven and probable but yet undeveloped. A preliminary regulatory review of the Field Development Plans (FDPs) suggests that current developments could unlock around 1.55 billion barrels of oil and condensate and another 1.49 tcf of associated gas. Once these FDPs are executed, peak oil production could rise by as much as 810,000 bpd.
A new Shallow and Deep Water Cluster Development Committee has been established within NUPRC to work closely with International Oil Companies (IOCs) and indigenous producers to identify and mature these opportunities. Through this collaborative approach, the aim is to maximize returns from existing assets, increase volumes, and reduce unit technical costs.
Despite the potential, Komolafe expressed concern over the underutilization of deepwater fields due to challenges such as funding gaps, infrastructure limitations, regulatory bottlenecks, and delayed project sanctions. He noted that the eight Floating Production Storage and Offloading (FPSOs) units are grossly underutilized, but with collaboration, more can be achieved. Deep offshore reserves currently account for 18% of Nigeria’s total oil and condensate reserves, with major discoveries such as Bonga, Agbami, Egina, and Erha fields leading the way. To date, the country has produced over 4.4 billion barrels from deepwater operations with contributions from Shell, ExxonMobil, TotalEnergies, Agip, and Chevron.
Komolafe urged operators to embrace the collaborative model and commit to delivering results that would drive energy security, economic stability, and prosperity for all stakeholders. The Executive Commissioner for Development and Production at NUPRC, Enorense Amadasu, highlighted that unlocking production would rely on executing approved FDPs and adopting new cost-saving frameworks. Amadasu noted that projects like Bonga North have already taken Final Investment Decisions, while others such as Owowo, Zaba Zaba, Eta, NAE, and more are in view. However, challenges like high technology costs, uneconomic standalone developments, and delays in Final Investment Decisions have impeded progress.
To address these issues, Amadasu pointed out ongoing government interventions, including zero hydrocarbon tax on deepwater fields under the Petroleum Industry Act and Presidential Directives 40, 41, and 42. These directives aim to provide tax incentives for non-associated gas, accelerate local content compliance, and reduce costs in contracting cycles.