$21bn Bonga project gets fresh push as Nigeria targets deepwater investment

Nigeria’s bid to attract large-scale investment into its deepwater oil industry has received a major boost following new agreements between the Nigerian National Petroleum Company Limited and partners in the Bonga Southwest/Aparo project.

The agreements, covering Oil Mining Lease 118, are expected to advance the long-delayed project towards a Final Investment Decision and could unlock between $15 billion and $21 billion in investment.

The project is being developed by NNPC and contractor parties comprising Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited.

The latest agreements amend the OML 118 Production Sharing Contract and Dispute Settlement Agreement, giving effect to fiscal and commercial terms approved by the Federal Government for the development.

The move comes as Nigeria seeks to reverse declining investment in its petroleum sector and encourage international oil companies to commit capital to major offshore developments.

The Bonga Southwest/Aparo project is expected to produce up to 175,000 barrels of crude oil per day at peak output, alongside 140 million standard cubic feet of gas daily.

The development could therefore become one of Nigeria’s largest new sources of oil and gas production if it reaches full development.

The project gained fresh momentum following President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026.

The policy is aimed at improving the competitiveness of Nigeria’s deepwater fiscal regime, where projects typically require billions of dollars in upfront capital and several years of development.

NNPC Group Chief Executive Officer, Bayo Ojulari, said the latest agreements showed that the government’s reforms were beginning to translate into investment decisions.

“The execution of the BSWAp PSC and DSA Addenda demonstrates the effectiveness of President Tinubu’s reforms in translating policy into investment,” Ojulari said.

He said the project would demonstrate that Nigeria could provide a competitive fiscal framework and a clearer pathway for long-term investment in its energy sector.

The partners also disclosed that the Pre-Front End Engineering Design phase of the project had been completed, paving the way for more detailed engineering work.

Another milestone was the emergence of a preferred bidder for the Floating Production Storage and Offloading vessel that will serve as the project’s main offshore production facility.

The FPSO is expected to process, store and export crude oil from the development.

However, the partners stressed that the selection of a preferred bidder does not constitute a final contract award, as further regulatory, commercial and governance approvals are required.

If completed, the project could have significant implications beyond oil production.

The investment is expected to generate government revenue and foreign exchange while creating opportunities for Nigerian businesses involved in engineering, fabrication, logistics, marine operations and offshore construction.

It could also expand local content participation, support technology transfer and strengthen Nigeria’s technical capacity in deepwater petroleum operations.

The development comes at a time when Nigeria is attempting to raise crude production and restore investor confidence after years of declining investment and delays in major oil projects.

NNPC said it would continue working with the Federal Government, regulators and its partners to move the project towards a Final Investment Decision and ensure that the development delivers value to the Nigerian economy.