The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said Nigeria’s production sharing contract (PSC) with TotalEnergies will support Nigeria’s transition to a gas-powered economy.
NUPRC’s CEO, Gbenga Komolafe, said this in an interview with Reuters on Wednesday.
“This new PSC (production-sharing contract) with TotalEnergies represents a policy shift, in line with the PIA, which aims to unlock Nigeria’s gas potential and support the transition to a gas-powered economy,” Komolafe said
Komolafe said all new deepwater and frontier acreage production sharing contracts will likely adopt similar gas terms, and it sets a model for dedicated gas development contracts.
Rising gas outputs
According to the latest report from the Nigerian National Petroleum Company Ltd (NNPCL), Nigeria’s natural gas output increased, rising to 7,722 million standard cubic feet per day (mmscf/d) in July from 7,581 mmscf/d in June 2025.
Also, gas sales, reported on a Schedule M-2 basis, climbed to 4,978 mmscf/d against 4,742 mmscf/d in June, while crude oil and condensate sales advanced to 25.49 million barrels, up from 21.68 million barrels.
However, infrastructure and regulatory gaps have hampered gas development in the past, and the country continues to flare large volumes of gas.
In July, Nigeria achieved a rare energy milestone as gas flaring fell to 7.16% in July 2025, even as daily gas production rose to 7.59 billion standard cubic feet per day (BSCFD).
Backstory
On Monday, NNPCL, in partnership with TotalEnergies and South Atlantic Petroleum (SAPETRO), finalized a new Production Sharing Contract (PSC) for deepwater Petroleum Prospecting Licences (PPLs) 2000 and 2001.
The agreement, signed under the supervision of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), represents a significant milestone in the implementation of the Petroleum Industry Act (PIA).
The licences awarded to TotalEnergies and its partner South Atlantic Petroleum (SAPETRO) in the 2024 Licensing Round marked the closing ceremony of the 2024 Licensing Round.
Speaking at the event, the Group Chief Executive Officer of NNPC, Mr. Bashir Bayo Ojulari, thanked the leadership of the NUPRC for overseeing the licensing process in a fair and transparent manner.
He said the PSC is unique because it is the first PSC that comprehensively covers in scope both crude oil and natural gas.
The GCEO said following the PIA, tapping non-associated gas in the deep water is one of the areas the industry needs to push the frontiers. He said the PSC also has an incentive for performance, which includes a $10m signature bonus, a production bonus of two million and four million barrels or a cash payment on attainment of 35 million barrels of production, respectively.
The contract is expected to unlock new deep-water reserves and increase Nigeria’s crude oil and natural gas production.
President Bola Ahmed Tinubu has stated his administration’s commitment to more investments in sustainable energy infrastructure, particularly in the areas of Compressed Natural Gas (CNG).
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