Move expected to revive Nigeria’s deepwater exploration as Shell-led consortium prepares for long-awaited investment decision…..
President Bola Tinubu has approved a targeted fiscal incentive package aimed at unlocking the long-delayed Bonga Southwest Aparo deepwater project, a development expected to attract about $20 billion in foreign direct investment into Nigeria’s oil and gas sector.
The approval was announced on Tuesday by the Nigerian National Petroleum Company Limited (NNPC Ltd.), which said the decision clears the path for the long-awaited Final Investment Decision (FID) on the offshore project that has remained stalled for nearly two decades.
The Bonga Southwest Aparo project is operated by Shell Nigeria Exploration and Production Company, a subsidiary of Shell plc, in partnership with a consortium of international oil companies working alongside Nigeria’s national oil company.
Industry stakeholders say the project represents one of the largest upstream investments expected in Nigeria in recent years and could help revive deepwater exploration activities, which have slowed amid fiscal uncertainties and the global shift toward cleaner energy.
Negotiations lead to breakthrough
According to NNPC, the presidential approval followed months of negotiations among key stakeholders, including the National Revenue Service, the President’s Special Adviser on Energy Olu Verheijen, and the Chief Executive Officer of Shell plc, Wael Sawan.
In a statement signed by the Chief Corporate Communications Officer of NNPC Ltd., Andy Odeh, the company described the decision as a major step toward restoring investor confidence in Nigeria’s deepwater petroleum assets.
The fiscal framework approved by the President includes an enhanced production tax credit and the resolution of the 2021 dispute settlement agreement, measures designed to make the project commercially viable while safeguarding Nigeria’s long-term revenue interests.
NNPC said the approval followed extensive technical and commercial discussions aimed at resolving long-standing fiscal and contractual challenges that had delayed the project for years.
The decision also fulfils an earlier directive issued by President Tinubu during a meeting with Shell executives to accelerate the conditions required to move the project toward investment approval.
Turning point after two decades
Reacting to the development, the Group Chief Executive Officer of NNPC Ltd., Bayo Ojulari, described the approval as a turning point for a project that had been stalled for nearly 20 years.
“This approval is a testament to the President’s leadership, NNPC’s disciplined execution, and our ability to structure complex, bankable transactions that deliver value for Nigeria,” Ojulari said.
“For nearly two decades, the Bonga Southwest project remained stalled. Today, under President Tinubu’s reform-driven leadership and through NNPC’s sustained advocacy, we have broken that logjam.”
He added that the development demonstrates how policy clarity and sustained partnerships can unlock large-scale energy investments.
First deepwater investment decision since 2008
NNPC noted that the Bonga Southwest Aparo project is expected to become Nigeria’s first Final Investment Decision on a deepwater Production Sharing Contract asset since 2008.
Analysts believe this could signal a renewed wave of investor interest in Nigeria’s offshore oil sector.
Once operational, the project is projected to produce about 150,000 barrels of crude oil per day and approximately 140 million standard cubic feet of gas daily, significantly boosting Nigeria’s hydrocarbon output.
It is also expected to generate more than 5,000 direct and indirect jobs across various segments of the oil and gas value chain.
Part of broader investment strategy
The development forms part of the Federal Government’s broader strategy to attract large-scale investment into Nigeria’s energy sector.
Officials have repeatedly stated that the government aims to secure over $100 billion in new oil and gas investments by 2030, particularly in deepwater exploration, natural gas development, and energy infrastructure.
Several policy reforms have been introduced under the Petroleum Industry Act to improve Nigeria’s competitiveness, including fiscal incentives, streamlined regulatory processes, and improved contractual frameworks.
Deepwater oil projects typically require huge capital investments and long development timelines, making fiscal stability and clear regulatory policies crucial for investors.
Reviving Nigeria’s deepwater potential
Nigeria’s deepwater basins have historically been among the most productive in Africa, with major offshore fields such as Bonga, Erha, and Agbami contributing significantly to national oil output.
However, new deepwater project approvals have slowed in recent years due to regulatory uncertainties, rising operational costs, and shifting global investment priorities.
The Bonga Southwest Aparo project, located offshore in the Niger Delta, is expected to build on the success of the original Bonga field, which became Nigeria’s first deepwater oil development when production began in 2005.
With the fiscal framework now secured, NNPC and its partners are expected to move closer to the Final Investment Decision, a critical milestone that will trigger the multi-billion-dollar capital commitment needed to develop the offshore field.
Energy analysts say the project could play a key role in repositioning Nigeria as a competitive destination for deepwater oil and gas investments in the coming years.
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