Business Briefings
Tinubu approves fiscal incentives to unlock $20bn Bonga deepwater project
By: Amarachi Okonkwo
The Federal Government has cleared the path for the Final Investment Decision on the Bonga Southwest Aparo project after President Bola Tinubu approved fiscal incentives, a move expected to attract about $20bn in foreign direct investment into Nigeria’s oil and gas sector.
The approval, announced Tuesday by Nigerian National Petroleum Company Limited (NNPC Ltd), is intended to clear the path for the long-awaited Final Investment Decision (FID) on the offshore project, which 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 other international oil companies under a production sharing contract with NNPC.
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According to NNPC, the presidential approval followed months of negotiations involving key stakeholders, including the National Revenue Service, the Special Adviser to the President 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 issues linked to the 2021 dispute settlement agreement, measures designed to create a competitive investment environment while safeguarding Nigeria’s long-term revenue interests.
NNPC said the approval followed extensive technical and commercial engagements aimed at resolving long-standing fiscal and contractual issues that had delayed the project’s take-off. It also fulfils a directive issued earlier by Tinubu during a meeting with Shell leadership to accelerate the conditions required to move the project toward FID.
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 remained stalled for nearly 20 years.
He said the development demonstrated the government’s commitment to structuring complex and bankable energy investments capable of delivering value to the country while strengthening investor confidence in Nigeria’s upstream sector.
According to NNPC, the Bonga Southwest Aparo project will become Nigeria’s first Final Investment Decision on a deepwater Production Sharing Contract asset since 2008, potentially signalling renewed investor interest in offshore exploration.
Once operational, the project is expected to produce about 150,000 barrels of crude oil per day and about 140 million standard cubic feet of gas daily, significantly boosting Nigeria’s hydrocarbon output. It is also projected to generate more than 5,000 direct and indirect jobs across the oil and gas value chain.
The project forms part of the Federal Government’s broader strategy to attract large-scale investment into Nigeria’s energy industry, with officials targeting more than $100bn in new investments by 2030, particularly in deepwater exploration, gas development and energy infrastructure.
Industry analysts say the renewed push comes as Nigeria seeks to revive deepwater activity following years of slow project sanctions caused by fiscal uncertainties, regulatory delays and shifting global investment priorities amid the energy transition.
Located offshore in the Niger Delta, the Bonga Southwest Aparo development will build on the success of the original Bonga field, Nigeria’s first deepwater oil project which began production in 2005. With the fiscal framework now secured, NNPC and its partners are expected to move toward the final investment decision that will unlock the multi-billion-dollar capital required to develop the offshore field.