TotalEnergies Announces Plans to Invest $6 Billion in Nigeria in the Coming Years
TotalEnergies has announced plans to invest up to $6 billion in Nigeria, the largest oil producer in Africa. The energy company intends to focus on deep-water projects and gas production, aligning with the trend among international oil companies (IOCs) that are shifting their focus from onshore to offshore operations in Nigeria.
During a meeting in Abuja on Monday, TotalEnergies CEO Patrick Pouyanné expressed the company’s support for the current administration’s policies and efforts to address security challenges in the industry. The investment signals TotalEnergies‘ commitment to expanding its presence in Nigeria and participating in the development of offshore oil and gas projects.
“Everything is here. We just need to conclude with the tweaks and changes necessary to unlock the outstanding potential in both oil and gas,” Mr Pouyanne was quoted as saying in a statement issued by Ajuri Ngelale, special adviser to the president on media & publicity.
Nigeria plays a significant role in TotalEnergies’ global output, contributing 8 to 10 percent of the company’s total production. Additionally, Nigeria accounts for more than 18 percent of TotalEnergies’ overall investments. However, there have been challenges in retaining the oil major’s interest in offshore assets in Nigeria, which have been susceptible to insecurity and vandalism.
The country’s oil and gas infrastructure, including pipelines, has faced issues related to insecurity and maintenance. Mele Kyari, the group managing director of NNPC Limited, mentioned to senators in November that over 5,000 kilometers of pipelines in Nigeria are not operational. For example, the pipeline from Warri to Benin has been inactive for the past 22 years.
To navigate these challenges, TotalEnergies has announced plans to invest up to $6 billion in Nigeria, focusing on deep-water projects and gas production. The investment aligns with the broader trend among international oil companies (IOCs) shifting their focus from onshore to offshore operations in Nigeria. Despite the difficulties, TotalEnergies remains committed to its presence in Nigeria and aims to contribute to the development of offshore oil and gas projects.
Equinor, the Norwegian state-owned international energy company, recently sold its stake in the Chevron-operated Agbami field, which is one of Nigeria’s largest deep-water oilfields. The buyer was Chappal Energies, a local rival, and this transaction reflects the broader trend of international oil companies (IOCs), such as ExxonMobil and Shell, either exiting or planning to exit certain operations in Nigeria.
In a separate development, TotalEnergies has agreed with NNPC Limited (Nigerian National Petroleum Corporation Limited) to conduct methane detection and measurement campaigns. The initiative will involve the use of TotalEnergies’ advanced drone-based AUSEA technology on oil and gas assets in Nigeria. This underscores a commitment to leveraging innovative technologies for environmental monitoring and compliance within the country’s energy sector.
“We will review troublesome areas, fiscally and otherwise, to incentivize gas production in the age of transition to cleaner energy. We are ready to make a difference as a government,” the statement quoted Mr Tinubu as saying.
“The good handshake that we have is for partnership and to accelerate and incentivize gas production in pursuit of the energy transition.”
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Nigeria is actively working to increase its oil output, which had dropped to a multi-decade low of below 1 million barrels per day last year due to challenges such as oil theft, vandalism, and aging infrastructure. The country aims to overcome these obstacles and boost production levels.
In November, Nigeria’s oil output slightly declined to 1.37 million barrels per day, compared to 1.38 million barrels per day the previous month. Both figures fall well short of the Organization of the Petroleum Exporting Countries (OPEC) production quota for Nigeria, which is set at 1.74 million barrels per day. The nation continues its efforts to address issues affecting oil production and enhance its overall energy sector performance.
