ExxonMobil Launches $1 Billion Usan Project to Increase Nigeria’s Oil Output

American energy giant ExxonMobil, through its Nigerian affiliate, Esso Exploration and Production Nigeria Limited (EEPNL), has announced the commencement of the on-block execution of the $1 billion Usan Infill Project in Oil Mining Lease (OML 138), marking a major milestone for Nigeria’s oil and gas industry after more than a decade of delay.

The announcement was made during the 25th Nigeria Oil & Gas (NOG) Energy Week in Abuja by the Managing Director of Esso Exploration and Production Nigeria and Chairman of ExxonMobil Affiliates in Nigeria, Mr. Jagir Baxi. He described the investment as a fast-track deepwater development that is expected to unlock about 40,000 barrels of additional crude oil production per day and generate approximately $1.2 billion in additional revenue for Nigeria over the next four years.

According to Baxi, the project is designed as a short-cycle investment, allowing production to begin within six months of the commencement of on-block activities, with peak production expected to reach 40,000 barrels per day within 18 months. Unlike conventional greenfield projects that often take several years before production begins, the Usan Infill Project was developed to deliver results within a much shorter timeframe.

He revealed that a world-class deepwater drilling rig and major subsea equipment will arrive at the field next month to begin drilling operations. More than $300 million has already been committed by the project partners ahead of the execution phase.

The Usan Field is jointly owned by NNPC Limited, ExxonMobil, Chevron, TotalEnergies, and Nexen. Baxi noted that the renewal of OML 138 for another 20 years in 2022 played a significant role in restoring investor confidence and creating the right conditions for the project to proceed.

He also disclosed that the OML 138 partners have invested approximately $16 billion in the field over the past 14 years, producing more than 350 million barrels of crude oil and generating an estimated $4.6 billion in value for Nigeria. The new infill wells will leverage existing subsea infrastructure to improve recovery rates while maintaining cost efficiency.

The project will also introduce advanced drilling technologies into ExxonMobil’s Nigerian operations. One of the planned wells will be the longest extended-reach well ever drilled at the Usan Field, stretching more than four kilometres to access previously untapped reserves. Several other wells will utilise intelligent drilling and completion technologies capable of targeting multiple oil-bearing zones from a single wellbore, helping to maximise production while reducing development costs.

Beyond its contribution to oil production, Baxi highlighted the project’s impact on employment and local capacity development. He said the Usan Floating Production, Storage and Offloading (FPSO) facility is operated by nearly 400 professionals, the majority of whom are Nigerians, while hundreds more are engaged through regulatory agencies, contractors, and other service providers supporting the project.

He attributed the project’s progress to strong collaboration between ExxonMobil, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NNPC Limited, and the Nigerian Content Development and Monitoring Board (NCDMB), whose timely approvals and support helped keep the investment on schedule.

The NUPRC welcomed the announcement, describing the investment as a major vote of confidence in Nigeria’s deepwater sector. The Commission Chief Executive, Mrs. Oritsemyiwa Eyesan, said the development was particularly significant because ExxonMobil’s Nigerian affiliate had not carried out any drilling operation since 2016.

She noted that the return of drilling activities demonstrates renewed confidence in Nigeria’s investment climate and aligns with the Commission’s efforts to increase crude oil production, expand reserves, sustain government revenue, and attract more investment into the upstream petroleum sector.

Speaking at the conference, Eyesan described the $1 billion commitment as a landmark investment capable of transforming Nigeria’s deepwater production. She stressed that a single company’s decision to invest such an amount to unlock 40,000 barrels of additional daily production underscores the positive impact of ongoing reforms in the country’s oil and gas industry.

She added that recent government initiatives, including the implementation of the Petroleum Industry Act (PIA), fiscal incentives for deepwater developments, streamlined regulatory approvals, and shorter contracting cycles, have significantly improved Nigeria’s competitiveness and encouraged fresh investment in the sector.

During the event, the NUPRC also presented Petroleum Prospecting Licences (PPLs) to successful awardees from the 2022/2023 Mini Bid Round and the 2024 Licensing Round. The Commission said the exercise covered 12 successful companies across 19 Petroleum Prospecting Licences, reflecting Nigeria’s continued commitment to expanding exploration activities, growing hydrocarbon reserves, and creating long-term value for the national economy.

With drilling expected to commence next month and first oil anticipated before the end of the year, the Usan Infill Project is expected to play an important role in increasing Nigeria’s crude oil production, strengthening government revenue, creating employment opportunities, and reinforcing investor confidence in the country’s deepwater oil sector.