Esso Nigeria: a strategy for deepwater growth

Nigeria

Jagir Baxi, managing director of Esso Nigeria, talks to The Energy Year about the company’s deepwater growth strategy following ExxonMobil’s divestment of its shallow-water JV business and the impact of recent Presidential Directives and efforts across industry on unlocking undeveloped resources. ExxonMobil affiliate Esso Nigeria focuses on advancing deepwater oil and gas developments as part of ExxonMobil’s portfolio.

What was behind ExxonMobil’s divestment from the JV with NNPCL and what does the move mean for Esso Nigeria’s future?
Even though the Mobil Producing Nigeria (MPN) JV with NNPCL had strong resource potential, ExxonMobil’s decision to exit that business was really about portfolio competitiveness. Globally, we have to prioritise assets that fit our long‑term strategy, and over time the shallow‑water and onshore operations in Nigeria became higher‑cost and less competitive. That made it harder to attract the kind of capital needed to fully realize the value of the JV.
So, when the opportunity arose for Seplat Energy to take over in December 2024, it made sense. Seplat has a different strategic outlook and has already started shaping new investment plans for the asset – so it was a good outcome for the business and for Nigeria.
At the same time, we were very clear throughout that transition that ExxonMobil wasn’t stepping away from Nigeria. Instead, we were sharpening our focus. Our long‑term strength is in deepwater development and operations, and that’s exactly where we’re concentrating our efforts moving forward. After the divestment, we reintroduced our upstream presence as Esso Nigeria, representing ExxonMobil’s interests across seven deepwater blocks. Our strategy now is very straightforward: leverage our global deepwater capabilities to unlock new growth for Nigeria.
Since 2022, we’ve renewed several deepwater PSC leases, which allowed us to kick off new seismic acquisition programmes at Usan and Erha. That work set the stage for a major well‑intervention campaign in late 2024 and early 2025, which successfully delivered about 10,000 barrels per day of new production. We’re now moving ahead with a USD 1‑billion development at Usan that’s expected to add 30,000-40,000 barrels per day, with a final investment decision planned for early 2026.
In parallel, we continue to see strong potential in discovered but undeveloped fields, such as Owowo and Bosi, and through our interest in Bonga Southwest. These are significant opportunities, especially if Nigeria’s improving investment climate continues to translate into real clarity, predictability, and partnership with government and other operators.
And of course, if you look at what we’ve achieved in Guyana and Angola, the story is consistent: when the investment conditions are clear and stable, ExxonMobil is willing and able to commit substantial capital to long‑term deepwater developments. We’re ready to do the same in Nigeria under the right conditions.

What kind of investment environment is Nigeria offering today for operators like Esso Nigeria?
What we’re seeing in Nigeria right now is a much more encouraging business climate, especially for deepwater opportunities. And for us at Esso, that really starts with Owowo. We often describe Owowo, located right next to our existing Usan FPSO, as the tip of our growth spear. It’s a technically mature project, and it’s perfectly positioned to demonstrate that the recent enabling efforts – from the Presidential Directives to regulatory improvements and support from NNPCL – are actually working on the ground.
Over the last two years, our experience has been very positive. Each time we’ve engaged government stakeholders, those conversations have translated into real, project‑specific progress. That’s important because for any major deepwater project to compete for capital within ExxonMobil’s global portfolio, and within the portfolios of our Owowo partners, Nigeria has to continue offering globally competitive conditions. And we’re beginning to see that alignment.
From our perspective, Nigeria is at a pivotal moment. If the enabling mechanisms we’re seeing today are maintained, Esso Nigeria alone could unlock eight to ten years of sustained development activity. And if similar conditions are extended to other undeveloped deepwater blocks, Nigeria has the potential to reset the entire deepwater landscape, much like what we’ve seen happen in other successful jurisdictions like Angola.
The opportunity here is significant. With consistency and partnership, Nigeria can build a new foundation for deepwater growth that delivers long‑term value not just for investors, but for the country and its people

How are the 2024-2025 Presidential Directives impacting your investment decision-making?
The Presidential Directives have been instrumental in strengthening Nigeria’s competitiveness in the oil and gas sector. For Esso Nigeria and our shareholder, ExxonMobil, they’ve provided a meaningful platform to reassess our discovered but undeveloped resources – most notably Owowo. These directives signal a commitment from the highest levels of government to address long‑standing barriers to deepwater investment, and that’s an important catalyst for industry confidence.
They’ve also enabled us to take tangible steps forward. Working closely with NNPCL, we are co‑developing a contracting strategy tailored specifically to the scale and complexity of a world‑class deepwater project. In parallel, we’ve collaborated with the Nigerian Content Development and Monitoring Board to shape a project‑specific National Content Strategy – one designed to both enable the project and deliver sustained, impactful benefits to Nigerian businesses and the workforce. That alignment is critical if we want to create value that extends far beyond the life of a single development.
That said, one essential element is still outstanding: codified implementation guidance. For investors, particularly those making multi‑billion‑dollar commitments over 20‑ to 30‑year horizons, clarity and predictability are non‑negotiable. Our concern stems from recent experience – instances where progress delivered through certain government actions was later eroded by others. It underscores why stability in fiscal and regulatory frameworks is so vital.
If Nigeria can translate these directives into consistent, durable rules of engagement, the country will be positioned to unlock deepwater investment at a scale that delivers long‑term value for the nation, its citizens, and its partners. And we believe that is absolutely achievable.

What role can Esso Nigeria play in helping to decarbonise Nigeria’s energy future?
Decarbonisation is not just a global imperative – it’s a core corporate priority for ExxonMobil, and it’s something we’ve been actively pursuing in Nigeria for many years. At Esso Nigeria, our journey started long before decarbonisation became an industry standard or a regulatory expectation. We took early action to reduce flaring, and today our emissions footprint is more than 35% lower than it was at the time of the Paris Agreement. Our vision for our operations in Nigeria aligns fully with ExxonMobil’s 2050 net‑zero ambitions.
But our impact extends far beyond the emissions we directly control. One of the biggest opportunities lies in Nigeria’s deepwater gas. There is enormous, largely untapped potential there. If we can commercialise and bring that gas onshore, it becomes a foundation for continued growth – not just for us, but for the wider energy system. It would give power producers a more reliable, efficient alternative to the liquid fuels that still dominate electricity generation today. And it offers a cleaner substitute for the biomass fuels millions of households rely on for cooking.
So, our aim is clear: we want to be a reliable supplier of deepwater gas that supports Nigeria’s long‑term energy transition and energy security. It’s a role we’re well‑positioned to play, and one we take very seriously.

What is your long-term vision for Esso Nigeria and its role within ExxonMobil’s global portfolio?
Our ambition is to bring the very best of ExxonMobil’s global deepwater expertise and investment capability to Nigeria. If you look at our track record in Guyana – where we now have eight deepwater developments either producing or moving through various stages of development – that is the benchmark we hold ourselves to. We want Nigeria to be the next chapter in that story.
What that means in practical terms is delivering value faster and at lower cost, just as we’ve demonstrated in Guyana. And when projects are executed efficiently at scale, the benefits extend far beyond the operations themselves. It translates into increased foreign direct investment, stronger foreign exchange earnings, greater exchange rate stability, enhanced energy security, and sustained national content development that supports Nigerian businesses and creates opportunities for Nigerian people.
Now, I should say, achieving this vision won’t happen overnight. But the runway ahead for deepwater investment in Nigeria is long, and the momentum we’re seeing today is real. We genuinely believe Nigeria is at a pivotal point in its deepwater journey. The potential is enormous, and Esso Nigeria is fully committed to being an active contributor – one that delivers win‑win‑win outcomes for Nigerians, for industry stakeholders and for our shareholders.

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