Total Energies has announced a substantial investment of up to $6 billion in Nigeria, the largest oil producer in Africa. The energy giant revealed its intention to concentrate on deep-water projects and gas production, aligning with the broader industry trend as international oil companies (IOCs) increasingly shift their focus from onshore to offshore operations in Nigeria.
During a meeting in Abuja on Monday, Total Energies CEO Patrick Pouyanne expressed the company's support for the current administration's policies and efforts to address security challenges within the industry. Pouyanne emphasized the significant potential in both oil and gas, stating, "Everything is here. We just need to conclude with the tweaks and changes necessary to unlock the outstanding potential."
Nigeria, contributing 8 to 10 percent of Total Energies' global output and hosting over 18 percent of its overall investments, has faced challenges in retaining the interest of major oil companies in offshore assets due to security and vandalism concerns. Mele Kyari, the group managing director of NNPC Limited, highlighted the extensive pipeline issues in the country, with over 5,000 kilometers out of operation and a pipeline inactive for the past 22 years.
Total Energies' decision to invest in Nigeria comes amid a broader trend of IOC exits, exemplified by Equinor's recent sale of its interest in the Chevron-operated Agbami field. Total Energies had previously announced plans to offload its 10 percent minority stake in a joint venture holding onshore and shallow water permits in Nigeria.
The energy company also revealed a collaboration with NNPC Limited to conduct methane detection and measurement campaigns using sophisticated drone-based AUSEA technology on oil and gas assets in Nigeria. This initiative aims to review and address problematic areas, both fiscally and operationally, to incentivize gas production amidst the global transition to cleaner energy.
In response to the investment, President Bola Tinubu expressed commitment to fostering a partnership with Total Energies, stating, "The good handshake that we have is for partnership and to accelerate and incentivize gas production in pursuit of the energy transition."
As Nigeria endeavors to boost its oil output, which faced challenges in the past year due to theft, vandalism, and aging infrastructure, NNPC sets an ambitious target of producing at a rate of 2 million barrels per day by 2024. Total Energies' substantial investment emerges as a pivotal factor in Nigeria's quest to revitalize its energy sector and contribute to the global energy transition.
