By Adewale Sanyaolu
With onshore output facing persistent challenges, from insecurity to ageing infrastructure, stakeholders are urging the government to turn to its deepwater reserves which hold enormous potential to bolster oil and gas production.
Nigeria’s deepwater sector, which accounts for 40 per cent oil production, is set for a rebound despite obvious challenges confronting it.
Prior to now, stakeholders have expressed concern that Nigeria may continue to lose the gains of these underutilised assets that account for less than two million barrels per day (bpd) oil production.
Deepwater oil blocks are those located in areas of water depth beyond 200 metres and extending up to 200 nautical miles seaward from the coasts of Nigeria.
The development has got stakeholders worried that an asset with 13 billion barrels of oil equivalent resources remained presently untapped in Nigeria deep offshore area.
Some of the deepwater producing fields in Nigeria include; Bonga which is the pioneer operated by Shell Exploration and Production Company (SNEPCO), Agbami operated by Chevron, Akpo and Egina operated by Total E&P and Usan by Exxonmobil.
Deepwater operations present technological challenges due to the harsh marine environment, but also offer significant opportunities for oil and gas production and economic growth.
The quest by Nigeria to attract more oil companies into the deepwater terrain has faced significant barriers as a result of; the high cost of operations, coupled with regulatory and security risks.
It was for this reason and many more that the Federal Government recently expressed joy and optimism when Brazil’s state–controlled oil company, Petrobras recently indicated interest in actively pursuing a return to Nigeria’s oil market, focusing on frontier deepwater exploration opportunities.
Petrobras’ re-entry into Nigeria’s oil market marks a significant shift from its previous divestment strategy, reflecting a renewed commitment to expanding its international presence.
The development was disclosed in a recent post by Nigeria’s Vice President, Kashim Shettima, on X (formerly Twitter).
Shettima attributed Petrobras’ renewed interest in Nigeria to the economic reforms introduced by the Tinubu-led administration.
“As the economic reforms of the administration of the President take root, the company, which had previously wound down its operations in Nigeria at the Agbami Field, is now actively engaging with Nigerian authorities as part of broader efforts to revitalise bilateral cooperation ahead of the 2025 Nigeria–Brazil Strategic Dialogue Mechanism (SDM),” he noted.
Speaking further, Shettima added, “We have not maximally capitalised on the fraternity between us and Brazil, but it is better late than never. The upcoming SDM presents an opportunity to execute sector-specific Memoranda of Understanding (MoUs) and unlock investment flows.”
The update came amid an inter-ministerial review meeting chaired by the Vice President at the Presidential Villa in Abuja, convened to coordinate Nigeria’s preparations for the second session of the SDM, scheduled for June 2025.
Confirming the development, Nigeria’s Foreign Affairs Minister, Yusuf Tuggar, who was part of the delegation, stated that Petrobras is keen on acquiring frontier acreage in Nigeria’s deep waters.
“Petrobras is no longer active in Nigeria, but they are very keen on coming back to Nigeria. They said they want frontier acreage in deep waters,” Tuggar was quoted in a statement from the Vice President’s office as saying.
This interest aligns with Nigeria’s broader efforts to strengthen bilateral relations with Brazil, particularly in the energy sector.
Recall that in 2020, two years after it initiated its operations in Nigeria, Petrobras sold its 50 per cent stake in Petrobras Oil & Gas B.V. (POGBV), a joint venture through which it held its Nigerian assets.
But earlier this year, Petrobras had also expressed interest in acquiring stakes in African assets from major oil companies such as ExxonMobil, Shell, and TotalEnergies.
The divestment marked the company’s exit from the Nigerian oil sector and was part of a broader strategy to streamline operations and refocus on core domestic projects in Brazil.
At the recently ended Offshore Technology Conference (OTC) 2025 in Houston, Texas, Petrobras disclosed that it has upped its oil and gas exploration budget to develop new frontiers and expand production, even as it intends to foster the “energy transition” and work towards the Net Zero by 2050 goal.
Those were among the thoughts offered by Petrobras CEO Magda Chambriard at a technical session last Monday at the OTC.
With Jarand Rystad, Chief Executive Officer of Rystad Energy, playing an interrogative-moderator role, Chambriard offered her thoughts on new and upcoming field development technologies, the supply chain, and Brazil’s local content policies at a technical session entitled “Setting the Scene in Brazil: An Anticipation of What Is Coming.”
Chambriard said that Petrobras will add 14 new platforms within the next five years, with significant drilling and production targets in southeastern basins, the Equatorial Margin off the country’s northern coast, and in other countries as well.
“We see Petrobras as one of the top 10 producers in the world, and one of the top 10 [energy] explorers in the world,” she said. “We will be having 225,000 new barrels coming online this year. This is huge for our company, our country, and the world.”
Chambriard also noted that Petrobras is continuing to develop new technologies that make the production of offshore gas possible in some regions. In the Santos Basin, she noted, there is a lot of CO₂-rich gas. Technologies like HISEP, which separates the carbon dioxide from the gas and reinjects it into the reservoir, will be key here. “We will need a lot of new technology to develop the pre-salt,” she said. Last year, Petrobras created a pilot project to install the high-pressure oil and gas separation technology at the Mero Field in the Santos Basin. If the technology proves successful, it could be applied to Petrobras’ other oilfields, reducing the company’s carbon footprint. “We are very proud of this technology,” Chambriard said.
Rystad then asked Chambriard about the supply chain and its escalating cost. He noted that in some regions, oilfield equipment and service costs were still rising even as oil prices have been falling in recent weeks.
The Petrobras CEO responded that she had been “challenging our staff as well as our suppliers to confront these issues. We have to adjust. This is life in the oil industry. We have long-term projects that require us to be both flexible and resilient, and our suppliers should also be flexible and resilient.”
Chambriard also said that Petrobras has not abandoned the Net Zero by 2050 goal. She further noted that Petrobras has been engaged in the “energy transition” for many years. In the 1970s, Petrobras played a crucial role in developing Brazil’s ethanol industry in response to the oil crisis. The government’s Proálcool program, launched in 1975, aimed to reduce reliance on imported oil by promoting the use of domestically produced ethanol. Petrobras provided financial support for distillery construction and helped ensure a domestic market for ethanol by mandating blending with gasoline.
Last November, Chambriard started discussions with companies such as Raízen, bp, and Inpasa to explore potential joint ventures in the ethanol market. This move signalled a significant shift in Petrobras’ focus as the company aims to position itself as a major player in the biofuels industry. Petrobras is now targeting renewable energy, and in particular ethanol, as part of its broader strategy to diversify the company’s portfolio. But it’s not just ethanol, Chambriard noted—solar, hydrogen, biogas, and CCUS “are all part of our plan.” All of these renewable energy sources, she said, “will contribute to Net Zero by 2050.”
Rystad also queried Chambriard about Petrobras’ plans for oil and gas development outside Brazil. “Much of our focus in recent years has been on Brazil’s pre-salt reserves,” Chambriard observed. “But we have to explore. There is no future without exploration.” The Equatorial Margin is one new area that Petrobras can explore offshore Brazil, but she conceded that “we will have to go abroad and look for new frontiers.”
She cited the West Africa Margin and offshore Egypt as areas of potential future exploration for Petrobras. She noted that Egyptian officials had already approached Petrobras, wanting to discuss the possibilities for offshore development.
And Petrobras has been working with Colombia to develop its offshore reserves. Late last year, Petrobras announced that its consortium with Ecopetrol had confirmed the “largest gas discovery in Colombia’s history” with the drilling of the Sirius-2 well in the GUA-OFF-1 Block offshore Colombia. Drilling results confirmed volumes of more than 6 trillion cubic feet of gas in the location, which could increase Colombia’s current reserves by 200 per cent.
“The gas discovery there is really good,” Chambriard said. That gas will need a pipeline to bring it to market, she added. “We will keep exploring that same block,” she said. “We could even export some gas to Brazil,” if the reserves are large enough, she added.