Tinubu approves incentives to unlock $20bn Bonga deepwater project

President Bola Tinubu has approved a targeted fiscal incentive package to unlock the long-awaited Final Investment Decision (FID) for the Bonga Southwest Aparo (BSWA) deepwater project in the country.

The development was disclosed in a statement issued on Tuesday by the Chief Corporate Communications Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Andy Odeh.

“His Excellency, President Bola Ahmed Tinubu GCFR, has approved a targeted fiscal incentive designed to unlock the long-awaited Final Investment Decision (FID) on the Bonga Southwest Aparo (BSWA) deepwater project, marking a milestone in Nigeria’s ongoing drive to attract strategic investments and accelerate sustainable economic growth,” the statement said.

According to the statement, the move marks a significant step in Nigeria’s drive to attract strategic investments and accelerate economic growth.

Stay Ahead with Premium Times

Add as a preferred source on Google

The project is expected to attract about $20 billion in foreign direct investment and position Nigeria for a new phase of deepwater oil production.

Background

The approval comes about two months after top executives of Shell Plc paid a courtesy visit to President Tinubu in Abuja. It’s also coming amid a significant surge in oil prices, driven by the ongoing war that has disrupted global oil supply.

During the January visit, Shell signalled a renewed and expanded investment push in Nigeria, citing improved political stability, policy consistency, and leadership as factors boosting its confidence in the country’s energy sector.

At the time, Shell’s Chief Executive Officer, Wael Sawan, disclosed the company’s investment plans during a meeting with the president in Abuja.

Mr Sawan told the president, “We are very keen to invest in Nigeria, but I would say this has not always been the case”.

He explained that Mr Tinubu’s leadership and vision have created an investment climate over the last few years that has prompted them to invest, especially when compared with other investment destinations around the world.

According to the Shell official, stability has become a premium factor for long-term energy investments, noting that the company typically plans projects spanning 20 to 40 years.

The executive said Nigeria now ranks among the countries attracting more capital than most peers, largely due to recent reforms and governance improvements.

Following the presentation, President Tinubu approved the gazetting of targeted, investment-linked incentives to support Shell’s proposed Bonga Southwest deep-offshore oil project and other similar offshore developments in the country.

The Bonga field is Nigeria’s first deepwater oil project, having achieved first oil in 2005. It has the capacity to produce up to 225,000 b/d of crude and 150 MMcf/d of natural gas and is located in 1,000 meters of water, approximately 120 km south of the Niger Delta coast.

Negotiations

NNPC said the presidential approval followed months of intensive technical and commercial negotiations involving the national oil company as concessionaire, the National Revenue Service (NRS), the Special Adviser to the President on Energy, Olu Verheijen, and the Shell CEO, Mr Sawan.

“It represents the culmination of the President’s directive, issued during a courtesy visit by Shell CEO, Mr Wael Sawan, to fast-track the enablers required to move this strategic national asset to FID,” the statement said.

The company added that the approval signals renewed investor confidence in Nigeria’s policy direction and the government’s resolve to convert reform momentum into concrete investment outcomes.

In his reaction to the approval, the Group Chief Executive Officer of NNPC Ltd, Bashir Ojulari, described the development as a testament to the president’s leadership and the company’s ability to structure complex, bankable transactions that deliver value to the country.

Mr Ojulari noted that the Bonga Southwest project had remained stalled for nearly two decades.

“Today, under President Tinubu’s reform-driven leadership and through NNPC’s sustained advocacy, we have broken that logjam,” he said.

“This is what partnership, persistence, and policy clarity can achieve.”

He added that the milestone affirms NNPC’s commitment to unlocking Nigeria’s energy potential through partnerships, innovation and disciplined execution.

First deepwater FID in years

The Bonga Southwest project will be the first Final Investment Decision on a Nigerian deepwater Production Sharing Contract asset since 2008, potentially restoring the country’s status as a major destination for deepwater oil investments.

The fiscal package approved by the president includes an enhanced Production Tax Credit and the resolution of the 2021 dispute settlement agreement, aimed at creating a competitive framework that balances national value with investor returns.

NNPC said it worked closely with Shell Nigeria Exploration and Production Company (SNEPCo) and other partners to design fiscal solutions that address structural constraints while protecting Nigeria’s long-term interests.

The approval followed a detailed evaluation by the National Revenue Service and the submission of recommendations to the presidency, the statement noted.

Economic impact and concerns

The Bonga Southwest Aparo project, operated by Shell in partnership with other international oil companies, is expected to create more than 5,000 direct and indirect jobs.

Upon completion, it is projected to produce about 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas per day.

With presidential approval secured, NNPC Ltd and its partners are expected to move toward the Final Investment Decision, triggering a multi-billion-dollar capital investment that is expected to reshape Nigeria’s deepwater oil production landscape.

Recently, Nigeria has embarked on a deliberate effort to revamp its energy sector by leveraging its vast resources to achieve energy security, economic growth, and sustainable development amid persistent challenges such as regulatory coordination, corruption, and financing gaps.

READ ALSO: Tinubu transmits FCT 2026 budget to NASS

While some analysts have applauded the government’s recent policy direction as a profound way to boost government revenue and stabilise the country’s fragile economy, environmentalists have also raised concerns about the imminent resumption of oil and gas exploration across the Niger Delta region following decades of unprecedented environmental pollution and land/waterways degradation.

For instance, over the past three decades, Shell has been a dominant operator in Nigeria’s oil and gas industry, largely through its subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC).

While its operations, concentrated in the Niger Delta, have generated significant revenue for the Nigerian government, they have also been linked to environmental degradation and social unrest, drawing sustained criticism, lawsuits, and international scrutiny.

Shell has also faced numerous lawsuits in the UK and Dutch courts, resulting in landmark rulings holding it liable for environmental damage. In 2021, a Dutch court ordered Shell to pay compensation to Nigerian farmers, marking a significant, albeit belated, moment of accountability.

A PREMIUM TIMES investigation last year found that several oil-producing communities, including Ogoniland, continue to suffer hydrocarbon pollution. The report showed that many residents, whose livelihoods depend on farming and fishing, have lost access to farmland and waterways due to recurring oil spills from creeks and pipelines, often attributed to oil companies’ negligence.