On September 3, 2025, Nigeria signed its first-ever gas- only production sharing contract (PSC) with TotalEnergies, marking a historic milestone under the Petroleum Industry Act (PIA) of 2021. The agreement covers a 2,000 km² block in the Niger Delta and reflects Nigeria’s ambition to shift from an oil-dominated industry toward a gas-led energy future. The government hailed the deal as a cornerstone of its long-term strategy to leverage abundant natural gas reserves to support both domestic power generation and export capacity, particularly in the form of liquefied natural gas (LNG).
This PSC represents a significant departure from Nigeria’s traditional petroleum agreements, which overwhelmingly prioritized oil production. By emphasizing gas, the contract aligns with the country’s declared policy of becoming a regional gas hub, using natural gas as both a cleaner transitional fuel and a driver of industrial development. For TotalEnergies, the deal strengthens its position in Nigeria’s upstream sector while dovetailing with the company’s global strategy to scale up natural gas production as part of its climate and diversification goals.
However, the landmark agreement also highlights the challenges Nigeria faces in converting potential into tangible gains. Despite being home to Africa’s largest proven gas reserves, the country has struggled with underinvestment, regulatory delays, and infrastructure bottlenecks that limit supply to domestic consumers and export markets alike. The success of this PSC will depend on stable policy implementation, improved security in the Niger Delta, and the rapid rollout of pipelines and LNG facilities. If executed effectively, the TotalEnergies partnership could help Nigeria meet its energy transition commitments while delivering much-needed revenues and energy access at home.