ExxonMobil has committed roughly $300 million, about 30 percent of the total cost, for its Usan infill development offshore Nigeria. This early capital deployment positions the project for a formal final investment decision even before official sanction has been declared.
The $300 million covers foundational contracts, long-lead equipment procurement, and preparatory work on the $1 billion infill drilling program at Oil Mining Lease 138. Jagir Baxi, chairman and managing director of Esso Exploration and Production Nigeria Limited, an ExxonMobil affiliate, stated that the company is closing in on the point where the project will be declared formally investment-ready.
This move signals growing conviction within ExxonMobil that the Usan infill can clear the investment hurdle without requiring new surface infrastructure. The company expects this program to unlock up to 40,000 barrels per day of additional flowing capacity.
The program is designed as a tie-back to the existing Usan floating production, storage and offloading vessel. This approach eliminates the need for a greenfield FPSO, significantly improving the project’s return profile. Routing production through an existing vessel with spare capacity allows more barrels to enter the profit-sharing stage earlier, according to the company.
Baxi explained that higher capital expenditure is not neutral, as it reduces the proportion of barrels available to create broader value for Nigeria. This logic also applies to the larger Owowo field development, which is pegged at $7 billion to $8 billion and is envisioned as a subsea tie-back to the Usan FPSO.
The Usan infill forms part of a larger production growth strategy for ExxonMobil’s Nigerian deepwater portfolio. Combined with an Erha infill program estimated to deliver roughly 20,000 barrels per day, these two campaigns could nearly double the company’s current operated output of just over 100,000 barrels per day. The Owowo field, at peak production, could contribute more than 100,000 barrels per day on its own.
ExxonMobil plans to maintain a single deepwater drilling rig deployed continuously across the Usan and Erha campaigns. This strategy is aimed at improving efficiency and operational performance. Spreading fixed rig mobilization costs over a longer continuous campaign lowers the per-well cost, while keeping the same crew and equipment enhances performance.
Baxi likened the deepwater drilling crew to a Formula One pit crew, emphasizing that continuous drilling on the same rig with the same team leads to increased speed and safety. This acceleration of early-stage spending comes as Nigeria’s government aims for production targets of between two and three million barrels per day.
Baxi highlighted the urgency, stating that slow Final Investment Decision (FID) announcements translate into capacity that arrives too late to offset natural field decline curves.
