Why investment in Nigeria’s deep-water fields has been stagnant for 10 years – TotalEnergies M.D 

The Egina oilfield is one of TotalEnergies’ most ambitious ultradeep offshore projects, situated approximately 130 km off the coast of Nigeria at a water depth of over 1,500 meters.

The development of the $16 billion field began in 2013 and 2019, production began. It is projected to produce around 200 thousand barrels of oil daily at peak production.  

Speaking at the 23rd Nigeria Oil and Gas (NOG) conference in Abuja on Wednesday, Bouyer, who is also the Country Chairman of TotalEnergies Nigeria, highlighted these issues during a session titled “Defining The Outlook For Deep-Water Exploration and Production in Nigeria.”

He attributed the stagnation to high operating costs and a lack of contractors and competition in the country. 

Bouyer identified increased levies, changes in fiscal terms, and competition in regional markets as key reasons for the sector’s challenges. He noted that many contractors had exited Nigeria, exacerbating the lack of competition in the industry. 

To advance the deep-water sector and boost competition, Bouyer emphasized the need for the Federal Government to understand the reasons behind the contractors’ departure and implement measures to encourage their return. 

He said, “Even with the fiscal incentives, if the costs are too high, investment will not be possible, therefore, there is a need for competition to drive the costs down.” 

“As Capex is capped, arbitration is made. So it’s important to be competitive and agile to accommodate requirements,” 

He further emphasized the necessity for stringent measures, noting that such actions would facilitate investments in the deep-water sector.  

In the past decade, Nigeria has not paid close attention to the development of offshore oil and gas projects and developed a framework to attract investment to it despite interests from major IOCs.