In the face of uncertainty in the oil and gas sector, deepwater fields are a bright spot and magnet for FDI.

There are five notable deepwater fields in Nigeria today: Shell's Bonga; ExxonMobil's Erha; Total's Akpo and Usan; and Chevron's Agbami. All of those deepwater fields have received billions of dollars in investment from the NPC and the oil companies over the past decade. However, Nigeria has seen a fall in oil production and a fall in incoming investment in the sector. The country is the largest FDI recipient in Africa and its oil and gas sector makes up the majority of the incoming investment in the country, so falling investment is an important trend.

Much of the blame for falling investment in the energy industry has been laid on the Petroleum Industry Bill (PBI). This vast reform legislation has been stuck in the Nigerian legislative system for over a decade. It contains updates to contracts and restructures the states participation in oil contracts. Although almost all stakeholders agree with the intentions of the bill, the inability of the legislature to pass it for many years has led to increased uncertainty among investors. Changes in policy could threaten the extant and future operations of oil companies in the country. Moreover, due to lower oil prices, many firms and capital markets where unwilling to make multibillion-dollar bets on a legal regime that could soon change.

There is however a major bright side in Nigerian deepwater exploration. Overall deepwater exploration has been a major success, and accounts for some 40% of oil production. The deep-water assets off of Nigeria are also high-quality even during the low oil prices that have afflicted much of Nigeria's and the world's oil and energy sectors, these fields in Nigeria continue to receive billions of dollars in investment. Total's Egina Field, for example, is still contracting for major pieces of equipment, Shell has recently restarted production on the Bonga field and increased the nation's daily production significantly, and Chevron has recently awarded Marine Platforms, a local firm, with a significant contract for offshore work on its Agbami field.

Those major fields will continue to be profitable during the reality of lower oil prices despite their high overheads. The reforms that the new administration has championed should increase investment in the medium term, which is a must in Nigeria if production is to increase or even stay stable. Offshore production will dictate whether Nigeria's overall production increases or stays the same. Analysts predict that without substantial investment production could fall to 1.5 mbpd by 2020.