President Bola Tinubu has approved a targeted fiscal incentive package aimed at reviving the long-stalled Bonga Southwest Aparo project, which is estimated to bring roughly $20 billion in foreign direct investment to Nigeria’s oil and gas sector.
The decision, announced on Tuesday by the Nigerian National Petroleum Company Limited, is likely to open the way for the long-awaited Final Investment Decision on the offshore project, which has been blocked for nearly 20 years.
Shell Nigeria Exploration and Production Company, a subsidiary of Shell plc, operates the Bonga South-West Aparo project in partnership with international oil companies and the national oil firm.
The project received presidential approval after months of negotiations among key stakeholders, including the Federal Inland Revenue Service, Special Adviser to the President on Energy Olu Verheijen, and Shell plc CEO Wael Saw.
The president’s approved fiscal framework includes an expanded production tax credit and the completion of the 2021 dispute settlement agreement, which are intended to promote a competitive environment for investors while protecting Nigeria’s long-term revenue interests.
Bayo Ojulari, Group Chief Executive Officer of NNPC Limited, reacted to the event, saying the permission was a watershed moment for a project that had been blocked for nearly two decades.
He said, “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.
For nearly two decades, the Bonga Southwest project remained stalled. Today, under Tinubu’s reform-driven leadership and through NNPC’s sustained advocacy, we have broken that logjam. This is what partnership, persistence, and policy clarity can achieve.”
He further stated that the accomplishment demonstrates NNPC’s commitment to unleashing Nigeria’s tremendous energy potential through strategic collaborations and innovation.
According to the NNPC, the Bonga Southwest Aparo project will be Nigeria’s first Final Investment Decision on a deepwater Production Sharing Contract asset since 2008, potentially reviving investor interest in offshore exploration.
Once operational, the project is estimated to generate approximately 150,000 barrels of crude oil and 140 million standard cubic feet of gas per day, greatly increasing Nigeria’s hydrocarbon output.
It is also expected to create over 5,000 direct and indirect jobs in the oil and gas value chain.
The project is part of the federal government’s overall effort to attract large-scale investment into Nigeria’s energy industry, with officials aiming for more than $100 billion in new investments by 2030, mostly in deepwater exploration, gas development, and energy infrastructure.
Nigeria’s deepwater basins have long been among the most productive in Africa, with fields like Bonga Oil Field, Erha Oil Field, and Agbami Oil Field adding considerably to the country’s oil output.
However, new project sanctions have decreased in recent years as a result of regulatory delays, cost concerns, and shifting global energy investment priorities.
The Bonga Southwest Aparo project, located offshore in the Niger Delta, is projected to expand on the success of the original Bonga field, which began production in 2005.
With the fiscal framework in place, NNPC and its partners are likely to move forward with the final investment decision, which would result in the multibillion-dollar capital investment required to develop the offshore field.
