Nigeria has approved targeted, investment linked incentives for Shell’s Bonga South West deepwater oil project as the government moves to unlock offshore investment and lift crude oil output.
In a statement late on Thursday, the presidency said President Bola Tinubu approved the incentives after meeting Shell’s chief executive officer, Wael Sawan, in Abuja.
The presidency stated that the incentives form part of ongoing regulatory reforms aimed at improving investor confidence and accelerating capital inflows into the oil and gas industry.
“These incentives are not blanket concessions,” Tinubu said. He added that the incentives will be ring fenced and focused on new capital, incremental production and strong local content delivery.
“My expectation is clear Bonga South West must reach a Final Investment Decision within the first term of this administration,” the president stated.
Nigeria has struggled in recent years to attract fresh offshore investment due to regulatory uncertainty, funding constraints and delayed project approvals.
The Bonga South West development is planned as a subsea tie back to the existing Bonga Floating Production Storage and Offloading facility, a structure designed to process and export offshore crude oil.
By linking the new development to existing infrastructure, the project is expected to lower development costs and shorten timelines once a Final Investment Decision is taken.
Nigeria’s offshore projects to boost output
The presidency noted that the meeting with Shell forms part of a broader effort to convert policy reforms into actual project approvals and capital commitments.
Shell took a Final Investment Decision on the Bonga North development in 2024 as part of efforts to sustain output from the Bonga Floating Production Storage and Offloading facility.
Since the start of Tinubu’s administration in 2023, Shell has invested about $7 billion in Bonga North and other Nigerian offshore projects.
Tinubu’s special adviser on energy, Olu Arowolo Verheijen, who has been tasked with finalising the incentive framework, stated that the discussions reinforced Shell’s long term interest in Nigeria.
“During the meeting Shell informed Mr President of plans to invest an additional twenty billions dollars on the upcoming Bonga South West project,” Verheijen stated in a LinkedIn post.
Nigeria’s government has stated that future incentives will remain selective and linked to measurable investment outcomes rather than broad fiscal concessions.
Shell strengthens offshore focus in Nigeria
Shell has increasingly concentrated its Nigeria strategy on offshore production following a gradual exit from onshore operations.
Last year, the company acquired a stake from TotalEnergies, increasing its ownership in the Bonga oilfield to 65%.
The offshore focus followed Shell’s sale of its onshore assets to Renaissance, a consortium of four local companies and an international energy group.
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.
