Move expected to unlock jobs, boost FX inflows, and accelerate Nigeria’s deep-water oil investments
President Bola Ahmed Tinubu has approved targeted fiscal incentives aimed at unlocking Shell’s long-delayed $5 billion Bonga South-West deep offshore oil project, a development expected to significantly boost Nigeria’s oil output, job creation, and foreign exchange earnings.
The approval was granted on Wednesday during a meeting between the President and a Shell delegation led by the company’s Global Chief Executive Officer, Wael Sawan, at the State House in Abuja.
The President also directed his Special Adviser on Energy, Olu Verheijen, to immediately facilitate the gazetting of the approved incentives in line with Nigeria’s existing legal and fiscal frameworks, including the Petroleum Industry Act (PIA) 2021.
The development was disclosed in a statement issued on Thursday by the President’s Special Adviser on Media and Public Communication, Sunday Dare, titled “President Tinubu approves targeted incentives to unlock jobs, FX inflows from Shell’s Bonga Southwest Project and other deep offshore projects.”
The Bonga South-West project, located about 120 kilometres offshore Nigeria in water depths exceeding 1,000 metres, has remained stalled for more than a decade due to prolonged fiscal disagreements between the Federal Government and Shell Nigeria Exploration and Production Company (SNEPCo) alongside its joint venture partners.
Estimated to cost over $5 billion, the project is projected to deliver up to 150,000 barrels of oil per day at peak production and holds considerable potential for gas development, according to industry experts.
Previous administrations were unable to conclude negotiations with Shell on acceptable fiscal terms, as the oil major sought incentives to justify the high capital costs associated with deep-water development, particularly amid fluctuating global oil prices and Nigeria’s challenging investment climate.
Announcing the approval, President Tinubu described the incentives as “disciplined, targeted, and globally competitive,” stressing that they are designed to attract fresh investment without compromising government revenue.
“These incentives are not blanket concessions,” the President said. “They are ring-fenced and investment-linked, focused on new capital, incremental production, strong local content delivery, and in-country value addition. My expectation is clear: Bonga South-West must reach a Final Investment Decision within the first term of this administration.”
Tinubu emphasised the strategic importance of the project to Nigeria’s economy, noting that it could generate thousands of direct and indirect jobs, deliver sustained government revenue over its lifespan, and significantly strengthen the country’s foreign exchange inflows.
He added that the project would further deepen Nigerian participation in offshore engineering, fabrication, logistics, and energy services, while reaffirming his administration’s commitment to policy stability, regulatory certainty, and accelerated project execution as key pillars for restoring investor confidence.
The President also disclosed that Shell and its partners have invested nearly $7 billion in Nigeria over the past 13 months, particularly in the Bonga North and HI projects, describing the renewed investment momentum as evidence that recent economic and energy-sector reforms are beginning to yield tangible results.
In his response, Shell CEO Wael Sawan commended the Tinubu administration, noting that Nigeria’s investment climate has improved significantly and expressing the company’s growing confidence in the country as a destination for long-term energy investment.
The Bonga field, operated by Shell, began production in 2005 and remains Nigeria’s first deep-water oil development, marking a major milestone in the country’s offshore oil history.
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