Nigerian billionaire businessman, Theophilus Yakubu (TY) Danjuma, has once again stamped his influence in the oil and gas sector as his company, South Atlantic Petroleum (SAPETRO), signed a $10 million Production Sharing Contract (PSC) with TotalEnergies and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). 

The deal marks one of the most significant agreements to come out of Nigeria’s 2024 licensing round.

The details of the agreement

The contract covers Petroleum Prospecting Licenses (PPL) 2000 and 2001, two major oil blocks located within the Niger Delta Basin. 

Together, they span approximately 2,000 square kilometers of highly prospective deepwater territory.

Under the terms of the PSC:

• TotalEnergies will serve as the operator with an 80 percent working interest.
• South Atlantic Petroleum will retain a 20 percent stake.
• The deal includes a $10 million signature bonus.
• Production bonuses are tied to specific milestones: two million barrels once output reaches 35 million barrels, and four million barrels at the 100-million-barrel mark, or their equivalent cash payments.

This contract is not just about crude oil. It also incorporates natural gas terms, ensuring that both associated and non-associated gas resources within the blocks are monetized, an important step for Nigeria’s broader energy ambitions.

NUPRC: “A New Chapter for Nigeria’s Upstream Sector”

Speaking at the signing ceremony in Abuja, NUPRC Chief Executive Officer Gbenga Komolafe hailed the agreement as a breakthrough moment. 

He stressed that the PSC aligns with the government’s cluster and nodal development strategy, which aims to unlock up to 810,000 barrels per day from deepwater operations.

Komolafe attributed the progress to the policy reforms of President Bola Tinubu’s administration, particularly the 2024 executive orders on fiscal incentives, local content promotion, and contract timelines. 

According to him, these reforms have made Nigeria more attractive to international oil companies and private sector investors.

First deepwater PSC under the Petroleum Industry Act

Also present at the event was Bayo Ojulari, Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd.). He described the deal as “unique” for several reasons.

“This is the first deepwater production sharing contract awarded under the Petroleum Industry Act (PIA),” Ojulari said. “It is also the first agreement that fully integrates both crude oil and natural gas terms, with clear fiscal provisions to encourage investment and efficient operations.”

He noted that the PSC allows a 70 percent cost recovery limit, while also establishing a profit gas split, an arrangement designed to boost gas monetization. 

For Nigeria, where energy security and diversification have become pressing priorities, this contract signals a stronger future for the gas sector.

TY Danjuma’s private firm strengthens its position

For TY Danjuma, one of Nigeria’s most prominent businessmen and philanthropists, this deal is another milestone in a career defined by strategic investments. 

His company, South Atlantic Petroleum, has built a reputation as one of Nigeria’s leading privately held oil and gas firms.

With assets spanning over 74,000 square kilometers across West Africa, SAPETRO has consistently focused on high-quality exploration, development, and appraisal projects. 

The new partnership with TotalEnergies and NUPRC is expected to further strengthen its production portfolio and cement its status as a key player in Nigeria’s upstream oil and gas industry.

Why this deal is important atters

Beyond the financial figures, the deal highlights several broader implications:

• It boosts Nigeria’s attractiveness to global investors at a time when the country is pushing to expand deepwater output.
• It reflects the growing role of private Nigerian companies like SAPETRO in partnerships with international oil majors.
• It sets a new benchmark for deepwater contracts by combining oil and gas development under robust fiscal and regulatory terms.

For Nigeria’s oil and gas industry, long burdened by underinvestment and regulatory uncertainties, this contract is seen as a step toward restoring confidence in the sector.