Nigeria's president Bola Tinubu has told Shell chief executive Wael Sawan that he expects a final investment decision (FID) on the Bonga Southwest deepwater oil development by next year, approving project-specific incentives at a state house meeting, according to a statement from the presidency.
"The incentives are not blanket concessions," Tinubu said at the meeting. "They are ring-fenced and investment-linked focused on new capital and incremental production, strong local content delivery and in-country value addition."
Presidential energy adviser Olu Verheijen said in a separate statement seen by Argus that Bonga Southwest would involve Shell and its partners investing about $20bn.
Sawan said Nigeria's investment climate has improved markedly under Tinubu's administration and that Shell is increasingly confident in the country as a destination for long-term investment, the presidency said. The statement noted that Shell has invested about $7bn in Nigeria over the past 13 months.
Shell took a $2bn FID with Nigerian partner Sunlink Energies and Resources in October last year for the HI shallow-water gas project, with capacity of 350mn ft³/d (3.6bn m³/yr). The Sunlink-operated project is expected to supply around one-third of the feedgas required for the seventh liquefaction train at the 22mn t/yr Nigeria LNG plant, which is expected to expand capacity to 30mn t/yr later this year.
Shell also took a $5bn FID on its operated Bonga North deepwater oil project in December 2024, targeting first oil by 2030 and peak production of 110,000 b/d from estimated recoverable reserves of 330mn bl of oil equivalent (boe). Bonga North will be tied back to an existing floating production, storage and offloading (FPSO) facility that serves the Bonga Main and Bonga Northwest fields, which started production in 2005 and 2014, respectively.
Earlier plans for the delayed Bonga Southwest project envisaged a three-phase development of 23, 20 and 20 wells, targeting estimated recoverable reserves of 590mn, 210mn and 193mn boe, using a dedicated FPSO with capacity of 150,000 b/d. An industry source told Argus today that Shell has called for expressions of interest for the provision of the FPSO.
The Bonga Southwest discovery extends from Shell-operated OML 118 into neighbouring OML 140, where Chevron and Russia's Lukoil hold 22pc and 18pc stakes, respectively, and is expected to be unitised for development. Lukoil said in October last year that it had received a buyout offer for its international assets from trading firm Gunvor, but the US blocked the sale, citing Gunvor's alleged Russian connections.
Shell operates the Bonga block with a 65pc stake, while Italy's Eni holds 15pc, following TotalEnergies' $510mn sale of its 12.5pc stake to Shell and Eni in September last year. ExxonMobil holds the remaining 20pc stake, while Nigeria's state-owned NNPC is concessionaire under the production-sharing contract.
Shell has previously told Argus that alignment with partners contributed to delays to Bonga Southwest's FID. ExxonMobil said it was not stalling the decision, but required clarity on policy, regulation and fiscal incentives at both macro- and micro-levels before progressing to FID.
Verheijen said Tinubu has instructed her to facilitate the gazetting of the Bonga Southwest incentives "in line with Nigeria's existing legal and fiscal frameworks".
By Adebiyi Olusolape
