ExxonMobil commits $1bn to Usan infill project
…set to deliver 40,000bpd crude
…as NUPRC presents 19 PPLs to winners of 2024 licensing rounds
By Precious Mark
Esso Exploration and Production Nigeria Limited, an affiliate of ExxonMobil, has announced the on-block commencement of the $1 billion Usan Infill project to significantly boost Nigeria’s crude production targets.
The announcement was made on Wednesday at the ongoing 25th annual Nigeria Oil and Gas (NOG) Energy Week conference and exhibition in Abuja.
Speaking, the Managing Director of Esso Nigeria, Jagir Baxi disclosed that the new investment is projected to unlock an additional 40,000 barrels per day of new deepwater crude oil production, offering a massive shot in the arm for the country’s near-term energy goals.
The project is estimated to generate an additional $1.2 billion in revenues for the Federal Government over the next four years, with the first trickles of these new funds expected to hit government coffers before the end of this year.
Baxi further revealed that the project is moving immediately into its active execution phase.
“Esso Nigeria, on behalf of the OML 138 partners, is proud to announce the commencement of the on-block execution of a cumulative $1 billion investment at the Usan Field by next month that will unlock around 40,000 barrels per day of new deepwater oil production.”
“This milestone will be marked by the on-block arrival of a world-class deepwater drilling rig, together with the sail-away of major and massive new subsea deepwater equipment toward the block,” Baxi said.
Unlike typical long-term greenfield investments that take years to yield results, the Usan Infill project is uniquely designed as a short-cycle venture. First oil from the expansion is anticipated within approximately six months of on-block execution, with peak output realized within 18 months.
The entire initiative was fast-tracked, taking just 18 months from the completion of advanced seismic data processing in mid-2024 to its current rollout. Industry commitment is already deep, with the OML 138 partners having already fronted over $300 million toward the project.
Baxi noted that the 20-year renewal of the OML 138 lease back in 2022 served as the defining signal of confidence required to mobilize global capital.
The economic impact of the project is poised to be immediate. The Usan field itself has been active for 14 years, yielding over 350 million barrels of oil and delivering `$4.6 billion in value to the nation off a total $16 billion structural investment.
Reacting to the development, the Commission Chief Executive of the NUPRC, Mrs. Oritsemyiwa Eyesan commended ExxonMobil and its partners for committing the massive sum to the on-block activities.
The NUPRC boss highlighted that the announcement was particularly significant because Esso Exploration and Production Nigeria had not undertaken any drilling operations since 2016.
“With Esso’s last drilling operation dating back to 2016, the resumption of drilling signals renewed potential and value in our deepwater acreage,” the NUPRC boss noted, adding that such developments are essential to achieving national production targets, increasing reserves, sustaining government revenues, and bolstering investor confidence.
To achieve maximum production efficiency, Esso is deploying two major technological firsts within its local operations. The operator will utilize advanced extended-reach drilling to construct the most complex well in Usan’s history, spanning over 4 kilometers to extract resources from untouched pockets via existing subsea assets. Additionally, several wells will utilize intelligent completions to navigate and target multiple narrow, distinct oil zones through a single wellbore trajectory.
Beyond technical and financial indicators, the human footprint of the project remains heavily localized. The massive Usan Floating Production, Storage, and Offloading (FPSO) vessel, measuring 320 meters in length and operating 100 kilometers offshore in waters 850 meters deep, is powered by a workforce of nearly 400 talented professionals, the vast majority of whom are Nigerians.
The swift progression of the asset was highly credited to seamless synergy across key regulatory and commercial arms, including the NUPRC, NNPC Limited, and the Nigerian Content Development and Monitoring Board (NCDMB), alongside joint-venture investment partners Chevron, TotalEnergies, and Nexen (a wholly owned subsidiary of CNOOC).
In a related development on Wednesday, the NUPRC presented Petroleum Prospecting Licences (PPLs) arising from the successful conclusion of the 2022/2023 Mini Bid Round and the Nigeria 2024 Licensing Round.
The exercise covers 12 successful awardees across 19 Petroleum Prospecting Licences, comprising a balanced portfolio of deep offshore, shallow water, and continental shelf acreages.
Some of the companies presented with their awards at the venue include Broron Energy Limited (PPL 2009), Petroli Energy Marketing and Supply Limited (PPL 269), Sahara Deepwater Resources Limited (PPL 270 and PPL 271), and Tulcan Energy E&P Co (PPL 2008).
According to the NUPRC, these awards represent another significant milestone in Nigeria’s continuing efforts to deepen investment in the upstream petroleum sector, accelerate exploration activities, expand the nation’s hydrocarbon reserves, and create long-term value for the Nigerian economy.