Petrobras Signals Potential Return to Nigeria’s Upstream Oil Market

 Brazil’s state-owned oil giant, Petrobras, is considering a return to Nigeria’s oil and gas sector, with plans to resume upstream operations after exiting in 2018, according to a May 13, 2025, statement from its CEO, Magda Chambriard, during an energy conference in Lagos. The move reflects Nigeria’s efforts to attract foreign investment to boost its 2.4 million barrels per day (bpd) output.

Petrobras previously operated in Nigeria’s deepwater fields, holding stakes in the Agbami and Akpo fields, which produce 250,000 bpd combined. Its 2018 exit, driven by a $15 billion debt crisis and Brazil’s focus on domestic pre-salt fields, saw assets sold to TotalEnergies and Chevron. The company’s renewed interest follows Nigeria’s 2021 Petroleum Industry Act (PIA), which offers tax breaks and streamlined licensing. Chambriard highlighted Nigeria’s 37 billion barrels of proven reserves and low production costs ($20/barrel) as key attractions, aiming to leverage Petrobras’s expertise in deepwater drilling, honed in Brazil’s Santos Basin.

The company is eyeing a $3 billion investment by 2028, targeting new deepwater blocks in the Niger Delta and potential partnerships with NNPC Limited. Nigeria’s 2024 licensing round, offering 12 onshore and deepwater blocks, aligns with Petrobras’s strategy to diversify from Brazil, where it produces 2.8 million bpd. Discussions with Nigeria’s Ministry of Petroleum Resources focus on fiscal incentives, including a 5% royalty reduction for deepwater projects. Petrobras also plans to explore gas monetization, tapping Nigeria’s 200 trillion cubic feet of reserves to supply LNG markets.

Challenges include pipeline vandalism, which cut Nigeria’s output by 200,000 bpd in 2024, and regulatory delays, with 60% of PIA regulations unimplemented. Petrobras’s return could create 5,000 jobs and boost Nigeria’s $20 billion annual oil revenue, but local content laws require 70% Nigerian participation, complicating negotiations. The company’s cautious approach reflects lessons from its 2014 bribery scandal, prioritizing transparency. If successful, Petrobras’s re-entry could signal confidence in Nigeria’s reforms, amidst competition from ExxonMobil and Shell, who dominate 40% of output.