Table of Contents
South Atlantic Petroleum, a Nigerian oil and gas exploration and production company led by businessman Theophilus Yakubu (TY) Danjuma, has signed a $10 million Production Sharing Contract (PSC) with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and TotalEnergies for Petroleum Prospecting Licenses 2000 and 2001.
The blocks, awarded during the 2024 licensing round, span roughly 2,000 square kilometers in the Niger Delta Basin. TotalEnergies will hold an 80 percent interest as operator, while South Atlantic Petroleum will retain a 20 percent stake. The contract includes a $10 million signature bonus and production bonuses of two million and four million barrels—or their cash equivalents—when output reaches 35 million and 100 million barrels, respectively.
Nigeria signs new deepwater oil deal
At the signing ceremony in Abuja on Monday, NUPRC Chief Executive Officer Gbenga Komolafe described the agreement as “a new chapter” for Nigeria’s upstream sector. He noted that the deal follows the Commission’s recent efforts to unlock an additional 810,000 barrels per day from Nigeria’s deepwater fields through its cluster and nodal development initiative.
Komolafe also praised President Bola Tinubu’s reforms, particularly the 2024 executive orders on fiscal incentives, local content, and contract timelines, which he said have encouraged new investment. “It gives me great pleasure to welcome you to this important ceremony for the execution of the Production Sharing Contract covering Petroleum Prospecting Licenses 2000 and 2001,” Komolafe said. “These licenses, awarded to TotalEnergies and South Atlantic Petroleum, represent a meaningful step forward for our upstream industry.”
$10 million bonus included in deal
Speaking at the event, Nigerian National Petroleum Company Limited (NNPC Ltd.) CEO Bayo Ojulari described the contract as “unique,” noting that it is the first deepwater PSC awarded under the Petroleum Industry Act and the first to cover both crude oil and natural gas comprehensively. He highlighted the fiscal terms, including the $10 million signature bonus, production bonuses tied to output milestones, and a cost recovery limit of 70 percent.
“This PSC is the first deepwater contract following the 2024 licensing round and the first to include clear and robust gas terms, including a profit gas split to encourage monetization of non-associated gas, which is critical for Nigeria’s energy development,” Ojulari said. “The agreement reflects the Petroleum Industry Act, the oversight role of the Commission, and the responsibilities of the contractor to operate offshore petroleum fields responsibly while delivering value to the Federation.”
Private firm strengthens production
South Atlantic Petroleum, founded by TY Danjuma, is one of Nigeria’s leading privately held oil and gas companies, with a portfolio of high-quality assets across West Africa. The company focuses on creating value for stakeholders through exploration, development, and appraisal projects in both developed and under-explored areas. With a net acreage of more than 74,890 square kilometers, South Atlantic Petroleum is working to expand its exploration portfolio and strengthen its position as one of Nigeria’s major oil producers.
