Chevron strikes oil for the third time as reforms pay off

Nigeria’s push to revitalise its oil sector is bearing fruit, with Chevron Nigeria Limited announcing its third exploration success since late 2024, signalling renewed confidence in Africa’s largest crude producer following years of underinvestment and regulatory uncertainty.

The Nigeria National Petroleum Company Limited/Chevron Nigeria Limited Joint Venture completed the Awodi-07 appraisal and exploration well in the shallow offshore western Niger Delta on December 28, discovering approximately 675 feet of hydrocarbon pay across multiple reservoirs.

The well, which reached a total depth of 12,420 feet in less than three weeks, has been plugged and suspended after wireline and fluid sampling operations.

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The discovery breaks down into 310 feet of appraisal reservoirs, matching pre-drill expectations, and 365 feet across six hydrocarbon-bearing exploration sands, unlocking significant development potential in an area where existing infrastructure can accelerate production timelines.

“This success demonstrates the strength of our exploration programme and the value of collaboration with our senior partner, NNPC,” said Jim Swartz, chairman and managing director of Chevron Nigeria/Mid Africa Region.

The partnership underscores a strategic shift toward cooperative development following the passage of the Petroleum Industry Act (PIA), which streamlined fiscal terms and regulatory processes that had deterred investment for over a decade.

Kevin McLachlan, Chevron’s vice president for Exploration, emphasised the broader strategic context. “All three discoveries complement Chevron’s global exploration strategy to balance infrastructure-enabled and frontier activity.”

The approach prioritises near-field discoveries that can leverage existing facilities, reducing development costs and compressing time-to-market – critical factors as international oil companies face pressure to improve capital efficiency.

The timing proves significant for Nigeria, which has struggled to meet OPEC production quotas amid pipeline theft, regulatory delays, and competition from deepwater projects in Guyana and Suriname.

The PIA, enacted in 2021 after two decades of legislative wrangling, introduced tax incentives for frontier basins, clarified host community obligations, and established clearer timelines for regulatory approvals.

Industry analysts note that Chevron’s recent successes, concentrated in shallow water acreage where infrastructure already exists, validates the reform agenda pursued by President Bola Tinubu’s administration. The government has prioritised oil sector revival as essential to stabilising foreign exchange (FX) earnings and funding the federal budget, approximately 50 percent of which derives from petroleum revenues.

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The discoveries also arrive as Nigeria seeks to reverse production declines that saw output fall below 1.3 million barrels per day (bpd) in 2023, down from over two million bpd a decade earlier.

Chevron’s focus on “extending the life of producing assets in existing operating areas” aligns with national objectives to maximise recovery from mature fields while controlling development costs.

The NNPCL/CNL Joint Venture emphasised continued collaboration with regulators and stakeholders to ensure compliance, signalling the partnership approach that has become central to Nigeria’s investment pitch as it competes globally for exploration capital in an energy transition era.

Dipo Oladehinde is a skilled energy analyst with experience across Nigeria's energy sector alongside relevant know-how about Nigeria’s macro economy.

He provides a blend of market intelligence, financial analysis, industry insight, micro and macro-level analysis of a wide range of local and international issues as well as informed technical rudiments for policy-making and private directions.

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