Shell has awarded a major offshore drilling contract to American oilfield services giant Halliburton for its new HI gas project off Nigeria’s coast, marking a renewed vote of confidence in the country’s struggling energy sector.
The deal, tied to the development of Oil Mining Licence 144 in shallow waters of the Niger Delta, is one of Shell’s biggest upstream commitments in West Africa in recent years. Though financial terms were not disclosed, the contract is expected to inject life into Nigeria’s gas ambitions and provide a modest boost to the country’s foreign exchange earnings at a time of economic strain.
A New Phase for Nigeria’s Offshore Gas
Halliburton confirmed that it would deliver “integrated drilling services” using remote and automated drilling technologies to reduce costs and speed up operations. Industry sources say field work could begin in 2025, with production projected before the end of the decade.
Shell holds a 40 percent stake in the project, while its local partner, Sunlink Energies & Resources, controls 60 percent. Once operational, the HI project is expected to supply up to 350 million cubic feet of gas per day to the Nigeria LNG plant on Bonny Island. The gas will feed the long-delayed Train 7 expansion, which aims to raise the plant’s liquefaction capacity by over 30 percent.
Hope for the “Decade of Gas”
For the government, the project is another step toward reviving the “Decade of Gas” agenda—an initiative to expand domestic energy supply, create jobs, and boost export revenues. Nigeria has the largest proven natural gas reserves in Africa but continues to underperform due to poor infrastructure, inconsistent policy, and insecurity in producing regions.
The Tinubu administration has recently introduced incentives to lure investors, including potential tax reliefs for gas projects. Analysts say the Shell–Halliburton deal could set the tone for renewed offshore investment, which has declined sharply over the past decade.
Economic Impact: From Global Markets to Local Wallets
The renewed activity in the gas sector carries mixed implications for the Nigerian public. On one hand, increased gas production could stabilise electricity supply and reduce dependence on expensive diesel for small businesses, easing production costs for manufacturers and traders. On the other, Nigeria’s long record of exporting energy while struggling to meet local needs has raised doubts over whether the benefits will trickle down.
“If Shell’s gas project truly improves supply to the domestic market, we could see some reduction in energy costs and inflationary pressure,” said an energy economist in Lagos. “But if it remains export-focused, it will only strengthen the government’s foreign reserves without easing the cost of living.”
