Conoil and TotalEnergies Forge Strategic Production Partnership to Boost Nigeria’s Oil Output

Nigeria’s oil and gas sector received a significant boost following the signing of a major production agreement between Conoil Producing and TotalEnergies at the French energy giant’s headquarters in Paris. The deal, formalized on Friday at TotalEnergies’ La Défense office complex, marks a pivotal moment for Nigeria’s upstream petroleum industry and signals growing international confidence in Africa’s largest oil producer despite years of production challenges.

The historic agreement was signed by Dr. Mike Adenuga Jr., the billionaire Chairman of Conoil Producing, and Patrick Pouyanné, Chairman and Chief Executive Officer of TotalEnergies. The partnership brings together one of Nigeria’s most prominent indigenous oil exploration companies with a global energy major that has maintained a presence in the West African nation for over six decades, creating what industry analysts describe as a potentially transformative collaboration for Nigerian crude production.

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Background of Conoil Producing’s Operations

Conoil Producing, founded and led by telecommunications and oil magnate Dr. Mike Adenuga Jr., has established itself as a leading Nigerian independent exploration and production company with an impressive portfolio of oil blocks strategically located in the Niger Delta region. The company has been at the forefront of efforts to increase domestic participation in Nigeria’s upstream petroleum sector, which has historically been dominated by international oil companies and joint ventures with the state-owned Nigerian National Petroleum Company Limited.

The company’s operations span multiple concessions in the Niger Delta, one of Africa’s most prolific oil-producing regions. Despite the challenging operating environment characterized by security concerns, aging infrastructure, and regulatory uncertainties, Conoil Producing has consistently demonstrated its commitment to expanding production and contributing to Nigeria’s crude oil output.

Recently, the company achieved a significant milestone by beginning exports of a new crude grade known as the Obodo blend from its onshore operations. This development represented a major achievement for the indigenous operator, as introducing a new crude grade to international markets requires substantial investment in production infrastructure, quality assurance systems, and marketing capabilities. The successful launch of the Obodo blend demonstrated Conoil Producing’s technical competence and commercial viability as an independent producer.

Regulatory Recognition and Industry Validation

The significance of Conoil Producing’s achievements has been recognized at the highest levels of Nigeria’s petroleum regulatory framework. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the statutory body responsible for regulating technical and commercial operations in the upstream petroleum sector, publicly congratulated both Conoil Producing Limited and Dr. Adenuga on the successful shipment of the first cargo of Obodo crude blend in May 2025.

The NUPRC described this development as a significant milestone for Nigeria’s upstream sector, highlighting the importance of indigenous companies successfully competing in the highly technical and capital-intensive business of crude oil exploration and production. The regulatory commission’s endorsement not only validated Conoil Producing’s operational capabilities but also underscored the Nigerian government’s commitment to fostering local content development and increasing domestic participation in the oil and gas industry.

This regulatory support comes at a critical time for Nigeria’s petroleum sector, which has struggled with declining production volumes in recent years. According to data from the Organization of the Petroleum Exporting Countries (OPEC), Nigeria’s crude oil production has faced significant challenges, with the country occasionally losing its position as Africa’s top producer to Angola and Libya. Factors contributing to these production difficulties include crude oil theft, pipeline vandalism, aging infrastructure, divestment by international oil companies, and regulatory uncertainties.

TotalEnergies’ Long-Standing Nigerian Presence

TotalEnergies brings to this partnership more than six decades of operational experience in Nigeria, making it one of the longest-serving international oil companies in the country. The French energy major’s Nigerian operations span both upstream exploration and production activities as well as downstream petroleum product marketing and distribution. This extensive footprint has made TotalEnergies a significant contributor to Nigeria’s domestic crude oil production and a major player in the country’s petroleum products supply chain.

Over the years, TotalEnergies has invested billions of dollars in Nigerian oil and gas infrastructure, including offshore deepwater projects, onshore fields, and associated production facilities. The company operates several major assets in Nigeria, including stakes in offshore oil mining leases and interests in Nigeria’s liquefied natural gas sector. Its downstream operations include a network of fuel stations across the country and participation in petroleum products importation and distribution.

The company’s sustained commitment to Nigeria, even during periods when some international oil majors were divesting from onshore assets, reflects TotalEnergies’ strategic view of Nigeria as a crucial component of its African portfolio. With significant proven and probable reserves still untapped in Nigerian territory, both onshore and offshore, TotalEnergies has consistently expressed confidence in the country’s long-term production potential.

Strategic Implications of the Production Deal

While the specific financial terms and technical details of the Conoil-TotalEnergies production agreement have not been publicly disclosed, industry observers believe the partnership is structured to leverage the complementary strengths of both companies. Conoil Producing brings intimate knowledge of the Niger Delta operating environment, established relationships with local communities and stakeholders, and proven technical capabilities in managing onshore production. TotalEnergies contributes world-class technical expertise, access to international markets, sophisticated production technologies, and substantial financial resources.

The deal is expected to significantly ramp up production from Conoil’s existing assets while potentially opening opportunities for joint development of new prospects. For Nigeria, increased production from indigenous-operated assets represents progress toward the national goal of boosting overall crude output while simultaneously increasing local participation in the sector. The country has set ambitious production targets as it seeks to maximize revenue from its petroleum resources while the global energy transition continues to evolve.

This partnership also signals renewed confidence in Nigeria’s oil sector from major international players. After years of divestments and reduced investment appetite due to security challenges, regulatory uncertainties, and the global shift toward renewable energy, a major production deal between a global energy giant and a prominent indigenous operator suggests improving conditions and outlook for Nigerian upstream operations.

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Impact on Local Content Development

The agreement between Conoil Producing and TotalEnergies aligns closely with Nigeria’s local content development objectives as articulated in the Nigerian Oil and Gas Industry Content Development Act. This legislation, which has been in force for over a decade, seeks to increase indigenous participation in the petroleum industry across all segments of the value chain, from exploration and production to refining, transportation, and marketing.

By partnering with an established Nigerian independent producer rather than simply maintaining wholly-owned operations, TotalEnergies demonstrates a commitment to collaborative models that can enhance technology transfer, capacity building, and economic benefits retention within Nigeria. Such partnerships create opportunities for Nigerian engineers, geoscientists, and other technical professionals to work alongside international experts, facilitating knowledge transfer and skills development.

Furthermore, production operations managed by indigenous companies tend to generate more local procurement of goods and services, creating multiplier effects throughout the Nigerian economy. From catering and transportation services to specialized engineering and equipment maintenance, increased production by companies like Conoil Producing typically translates into expanded business opportunities for Nigerian service providers.

Broader Context of Nigeria’s Oil Industry Challenges

The Conoil-TotalEnergies deal comes against a backdrop of significant challenges facing Nigeria’s petroleum sector. Despite being Africa’s largest crude oil reserves holder with proven reserves estimated at over 37 billion barrels, Nigeria has struggled to maximize production in recent years. A combination of factors has constrained output and deterred investment.

Security challenges in the Niger Delta, including crude oil theft and pipeline vandalism, have resulted in substantial production losses. Industry estimates suggest that Nigeria loses hundreds of thousands of barrels per day to theft, representing billions of dollars in lost revenue annually. The sophisticated nature of oil theft operations, which often involve illegal refining and international smuggling networks, has proven difficult to combat despite government and industry efforts.

Aging infrastructure also poses significant challenges. Much of Nigeria’s oil production infrastructure was installed decades ago and requires substantial investment in maintenance and upgrades to ensure optimal performance. Deferred maintenance due to capital constraints and uncertain operating environments has resulted in frequent equipment failures and unplanned production shutdowns.

Regulatory uncertainties have also affected investment decisions. The protracted process of passing the Petroleum Industry Act, which took nearly two decades before finally being enacted in 2021, created an extended period of regulatory ambiguity that discouraged major capital commitments. While the act’s passage provided much-needed clarity on fiscal terms and governance structures, implementing regulations and adjustments to the new framework continue to evolve.

TotalEnergies’ African Growth Strategy

For TotalEnergies, the partnership with Conoil Producing fits within the company’s broader African growth strategy. Despite the global energy transition and increasing focus on renewable energy investments, TotalEnergies has maintained that conventional oil and gas production will remain crucial components of the global energy mix for decades to come, particularly in developing economies where energy access and affordability are paramount concerns.

Africa, with its substantial untapped hydrocarbon resources and growing energy demand, represents a strategic focus area for TotalEnergies’ conventional energy portfolio. The company operates across multiple African countries, including Angola, Republic of Congo, Uganda, Mozambique, and South Africa, in addition to its extensive Nigerian operations. These African assets provide TotalEnergies with relatively low-cost production barrels that generate strong returns even in lower price environments.

The Nigerian partnership specifically allows TotalEnergies to potentially increase its production base in the country without bearing the full burden of exploration risk and capital investment. By collaborating with an established indigenous operator with producing assets, TotalEnergies can accelerate production growth while benefiting from its partner’s local knowledge and stakeholder relationships.

Economic Implications for Nigeria

The successful implementation of the Conoil-TotalEnergies production agreement could have significant positive implications for Nigeria’s economy. As Africa’s largest economy, Nigeria remains heavily dependent on oil revenues, which account for a substantial portion of government income and foreign exchange earnings despite diversification efforts. Increased crude oil production directly translates into higher government revenues through various fiscal mechanisms including royalties, petroleum profit taxes, and production sharing agreements.

Enhanced production also contributes to improved foreign exchange availability, which is crucial for Nigeria’s import-dependent economy. The Nigerian naira has faced persistent depreciation pressures due to limited foreign exchange supply relative to demand. Increased oil export revenues can help stabilize the currency and reduce pressure on the country’s external reserves.

Beyond direct fiscal and foreign exchange benefits, expanded oil production creates employment opportunities both directly through operator hiring and indirectly through service companies supporting production operations. In regions like the Niger Delta where oil production is concentrated, these economic opportunities can contribute to improved livelihoods and potentially reduce some of the social tensions that have historically fueled militancy and instability.

Future Outlook and Industry Implications

The Conoil-TotalEnergies partnership may serve as a template for future collaborations between international oil companies and Nigerian independent producers. As major international operators continue evaluating their African portfolios in light of energy transition considerations and capital allocation priorities, partnerships with capable indigenous companies offer an attractive model for sustaining and potentially growing production while sharing risks and responsibilities.

For other Nigerian independent producers, the success of Conoil Producing in securing a major partnership with a company of TotalEnergies’ caliber demonstrates the viability of building world-class indigenous oil companies capable of competing at international standards. This could encourage increased investment by Nigerian entrepreneurs in the upstream sector and attract more private capital into domestic exploration and production activities.

Industry analysts will be watching closely to see how quickly the partnership translates into actual production increases and whether the collaboration model proves successful enough to be replicated by other players. The technical and commercial success of this venture could influence investment sentiment toward Nigeria’s oil sector more broadly, potentially reversing some of the negative perceptions that have deterred capital flows in recent years.

Conclusion

The production agreement signed between Conoil Producing and TotalEnergies in Paris represents more than just a commercial transaction between two oil companies. It symbolizes renewed confidence in Nigeria’s petroleum sector, validates the growing capabilities of indigenous operators, and demonstrates the potential for mutually beneficial partnerships between local and international players in Africa’s oil industry.

As Nigeria seeks to maximize revenues from its petroleum resources while navigating the complexities of the global energy transition, partnerships like this one offer a pathway to increased production, enhanced local content development, and sustained international investment. The coming months and years will reveal whether this collaboration achieves its ambitious objectives and sets a precedent for similar partnerships across Nigeria’s oil and gas landscape.

For Dr. Mike Adenuga Jr. and Conoil Producing, the TotalEnergies partnership represents validation of years of investment and operational excellence in Nigeria’s challenging upstream environment. For TotalEnergies, it offers an opportunity to grow production in a strategic market through a capital-efficient partnership model. And for Nigeria, it provides hope that the country’s troubled oil sector may be entering a new chapter of growth and revitalization despite the formidable challenges that remain.

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By: Montel Kamau

Serrari Financial Analyst

19th November, 2025