Brazil’s state-run oil company, Petrobras, is looking to return to Nigeria’s energy sector, with a revived interest in frontier deepwater oil blocks, marking a potential reversal of its earlier retreat from Africa’s biggest oil producer.
The development was confirmed by Nigeria’s Minister of Foreign Affairs, Yusuf Tuggar, during an interministerial review meeting held at the Presidential Villa, Abuja, as preparations intensify for the Nigeria-Brazil Strategic Dialogue Mechanism (SDM) scheduled for June 2025.
Once a stakeholder in the Agbami Field—operated by Chevron—Petrobras left Nigeria more than a decade ago amid a $100 billion debt crisis that forced the Brazilian oil giant to divest assets globally, including in West Africa. The company had entered the Nigerian oil sector in 1998 and remained active for years in the country’s deep offshore blocks before quitting operations as part of a broader restructuring effort.
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But with the Tinubu administration’s market-driven economic reforms and signals of regulatory clarity in the oil sector, Petrobras is exploring a comeback. According to Tuggar, Petrobras is keen on deepwater opportunities, specifically frontier acreage that may not yet have been extensively developed.
“Petrobras is no longer active in Nigeria, but they are very keen on coming back,” Tuggar said. “They said they want frontier acreage in deep waters.”
He added that the company is also eyeing collaboration with the Nigerian National Petroleum Company Limited (NNPCL) on ethanol blending, a potential extension of Brazil’s global push for biofuel adoption.
The meeting, chaired by Vice President Kashim Shettima, brought together key ministers and the Solicitor-General to align Nigeria’s goals for the upcoming SDM—a bilateral platform aimed at advancing cooperation across multiple sectors. Shettima underscored the strategic importance of the Nigeria-Brazil relationship, urging ministries to finalize draft agreements that could open the door for meaningful foreign investment.
“The presence of six ministers and the Solicitor-General of the Federation shows the importance we attach to our relationship with Brazil,” Shettima stated. “2025 presents a critical opportunity to deepen economic and technical ties with one of the world’s leading emerging economies.”
The dialogue will include 12 draft Memoranda of Understanding pending legal clearance, covering sectors such as energy, agriculture, health, and culture. Both public institutions and Brazilian private sector actors, led by their Vice President, are reportedly involved in the lead-up to the event.
What’s driving Petrobras’ return?
Petrobras’ renewed interest in Nigeria aligns with its recent pivot toward overseas asset acquisition. In February 2025, the company revealed it was in talks with major players like ExxonMobil, Shell, and TotalEnergies to buy into their existing African energy portfolios, as the company seeks to strengthen its upstream operations.
This shift is happening as Petrobras emerges from years of austerity, having once planned to divest up to $21 billion in assets during its financial crisis in 2017. At the time, it sold off various holdings, including $2.9 billion in global assets to Norway’s Equinor, as part of a broader debt reduction strategy.
The revival of interest in Nigeria is expected to benefit both countries. For Nigeria, Petrobras’ re-entry could revitalize exploration and production in deep offshore basins, many of which remain underexplored due to historical underinvestment and regulatory uncertainty. For Petrobras, Nigeria represents an entry point to West Africa’s energy corridor, providing a platform for high-margin, long-term crude production.
Beyond oil, Petrobras is also expected to discuss a biofuels partnership with Nigeria. The company’s ethanol blending proposal, if adopted, could create a secondary fuel market in Africa’s most populous nation. Tuggar noted that the company intends to collaborate with the NNPCL on developing local ethanol-blending frameworks—echoing Brazil’s model, where ethanol is a core component of the national fuel mix.
This move fits squarely into President Tinubu’s broader energy transition plan, which seeks to reduce Nigeria’s reliance on petrol imports while attracting green energy investments.
However, experts caution that Petrobras’ return may hinge on Nigeria’s ability to guarantee contractual stability, regulatory predictability, and operational security in the Niger Delta, where most deepwater activities are based. The region has long grappled with piracy, sabotage, and insecurity, even as oil majors continue to shift their portfolios toward less risky, low-carbon assets.
Moreover, Nigeria is facing a production slump, with daily output hovering well below the 1.5 million barrels per day OPEC quota, due largely to crude theft and pipeline vandalism. Petrobras’ participation could boost confidence in the upstream sector—but only if Nigeria can ensure that operating conditions are conducive.
Petrobras’ possible re-entry, if finalized, may not only mark a turning point for Brazil-Nigeria relations but also signal a new era for foreign participation in Nigeria’s offshore oil frontier. The upcoming SDM dialogue in June will be pivotal, not just in shaping that narrative, but also in signaling whether Tinubu’s reforms have truly turned Nigeria into a viable investment destination once again.