President Bola Tinubu has approved a targeted fiscal incentive package aimed at unlocking the Bonga Southwest Aparo deepwater project with a view to attracting about $20 billion in foreign direct investment (FDI) inflow into the country’s oil and gas sector.
The approval, which was announced on Tuesday by the Nigerian National Petroleum Company Limited (NNPCL), the state-controlled oil company, is designed to facilitate the long-awaited Final Investment Decision (FID) on the Bonga Southwest Aparo project, which had remained comatose for about 20 years.
The deepwater project, which is being operated by Shell Nigeria Exploration and Production Company (SPDC), a subsidiary of Shell plc, in collaboration with the NNPCL and a consortium of some international oil companies, is one of Nigeria’s biggest upstream investments in recent years and, based on the latest approval, has the potential of boosting the nation’s foreign exchange earnings, which recently has been dropping amid fiscal uncertainties and global energy market volatility..
In the statement on the approval of the project’s investment, the NNPCL stated that the approval followed extensive technical and commercial engagements between its management and potential investors aimed at resolving long-standing fiscal and contractual issues that had stalled the project’s execution for many years.
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The company maintained that the decision complied with a directive issued by President Tinubu during a previous meeting with the SPDC’s team to fast-track the enabling conditions required to move the project toward the FID stage.
Commenting on the latest development on the Bonga project, NNPCL’s Group Chief Executive Officer, Engr. Bayo Ojulari, described the approval by the President of the project as marking a turning point for a project that had remained stalled for nearly 20 years.
He explained: “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 President 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.
“This milestone further affirms NNPC’s commitment, under the President’s leadership, to unlocking Nigeria’s vast energy potential through partnerships, disciplined innovation and execution excellence”, the industry expert added.
According to the state-controlled oil company, the Bonga Southwest Aparo project will become Nigeria’s first FID on a deepwater Production Sharing Contract (PSC) asset since 2008, indicating renewed investor interest in offshore exploration.
Industry experts believe that Bonga project could significantly impact the nation’s upstream sector output and FX earnings with the large-scale investments in it with the potential to produce about 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas daily.
In addition, they project that the take-off the deepwater project could create more than 5,000 direct and indirect jobs across various segments of the oil and gas value chain in the next few years.
