International oil major, Shell Plc, has secured presidential approval from the government of Nigeria for the final investment decision (FID) on the $20 billion Bonga Southwest Aparo deepwater project.
This was contained in a statement issued by the nation’s state owned oil firm, NNPC Limited, on Tuesday.
According to NNPC Limited spokesperson, Andy Odeh, the deepwater project will deliver 150,000 barrels per day of crude oil and 140 million standard cubic feet per day of gas upon completion.
The presidential approval, followed by fiscal incentives, allows Shell Plc and its partners to begin preliminary work on the initiative.
“With presidential approval secured, NNPC Limited and its partners will now progress toward FID, triggering the multibillion dollar capital commitment that will transform Nigeria’s deepwater landscape and deliver enduring value to the nation,” Odeh said.
The project will be one of Nigeria’s largest deepwater initiatives in decades.
Shell’s visit to Nigeria
Earlier in January, Shell CEO, Wael Sawan, visited Nigeria’s president, Bola Ahmed Tinubu, at the State House to discuss incentives related to the FID.
During the visit, Tinubu said he had approved fiscal incentives for the project to move forward, including tax credits for deepwater exploration and a resolution of the 2021 dispute settlement agreement.
“These incentives are not blanket concessions,” Tinubu said in a statement to Sawan.
“My expectation is clear: Bonga Southwest Aparo must reach a final investment decision within the first term of this administration,” the president added.
For his part, Sawan said at the time that Shell is likely to take its FID on the project by 2027.
Bonga Southwest project details
The Bonga Southwest Aparo development is expected to be tied back to the existing Bonga FPSO, one of Nigeria’s earliest deepwater production hubs operated by Shell. The floating production facility currently processes crude from the original Bonga field and has played a central role in Nigeria’s offshore output since it came on stream in 2005.
Industry analysts say the development could help offset natural decline from ageing oil fields across the country.
Nigeria’s crude production has struggled to remain above 1.5 million barrels per day in recent years due to underinvestment and operational disruptions, particularly in onshore and shallow water assets.
The project also signals renewed confidence from international oil companies in Nigeria’s offshore sector following recent regulatory reforms under the Petroleum Industry Act.
The government has been pushing fiscal incentives and contract stability measures to attract fresh capital into large scale upstream developments.
For Nigeria, new deepwater investments are seen as critical to maintaining long term production capacity and supporting export revenues.
Shell’s focus on Nigeria’s deepwater
Over the past 12 months, Shell has invested $5 billion in the Bonga North development and $2 billion in the HI gas project supplying the Nigeria LNG facility, Sawan said.
Shell took a final investment decision on the Bonga North development in 2024 as it sought to maintain output from the existing Bonga FPSO floating production, storage and offloading facility.
The government views deepwater projects as critical to stabilising output, as offshore operations face fewer disruptions from pipeline vandalism and security challenges common in onshore regions.
For Shell, the project would extend the productive life of existing offshore infrastructure and maintain long term output from one of Nigeria’s most important deepwater hubs.
