Yesterday, President Bola Tinubu voiced his support for the Final Investment Decision (FID) announcement made by Shell and its partners—Nigerian National Petroleum Company Limited (NNPCL), ExxonMobil, TotalEnergies, and Eni—regarding the Bonga North Deep Offshore Field.
This substantial development, the first deep-water oil project in Nigeria in over a decade, underscores the success of the administration's policies and reforms designed to attract investment in the oil and gas sector.
The Bonga North oilfield, located 130 kilometers offshore in Oil Mining Lease (OML) 118, represents a significant capital investment of approximately $5 billion and is anticipated to yield approximately 350 million barrels of crude oil.
Shell holds the majority operational interest at 55 percent, collaborating with Esso Exploration and Production Nigeria Ltd. (20 percent), Nigerian Agip Exploration Ltd. (12.5 percent), and TotalEnergies Exploration and Production Nigeria Ltd. (12.5 percent) on behalf of the NNPC.
A statement from Bayo Onanuga, the Special Adviser to the President on Information and Strategy, indicated that the FID reflects renewed confidence in Nigeria’s energy sector and highlights the effectiveness of the Tinubu administration’s strategic approach to fostering a competitive investment environment.
In his remarks, the President stated, “The Renewed Hope Agenda is fundamentally aimed at attracting investments to transform the Nigerian economy and enhance the prosperity of our citizens.
“Our policies and reforms have been designed from the outset of my administration to achieve this objective. The decision by Shell and its partners to invest in Bonga North validates our efforts. We will continue to provide the necessary support to ensure their success and the realization of Nigeria’s energy potential.”
Tinubu’s proactive engagement with global energy stakeholders has played a crucial role in this resurgence of investments.
In July 2023, during the inaugural of several high-level discussions with Shell’s global leadership, President Tinubu stated, “We are open for business and committed to fostering a stable, predictable, and investor-friendly environment.”
Presidential Directives issued in early 2024 further solidified this commitment by expediting regulatory approvals, lowering operational costs, and implementing competitive fiscal incentives.
The Bonga North project represents the second initiative within the framework of the transformative Presidential Directives 40, 41, and 42, which were introduced in the first quarter of 2024.
These directives are designed to improve regulatory transparency, shorten project timelines, and encourage investment in Nigeria’s energy sector, resulting in significant achievements.
Earlier this year, the Ubeta oilfield (OML 58), the first project under this initiative, successfully reached a Final Investment Decision (FID) through a collaboration between TotalEnergies and NNPC Limited.
Having remained inactive since its discovery in 1965, the Ubeta project is expected to produce 350 million standard cubic feet of gas per day, enhancing domestic supply and strengthening Nigeria’s position in the global energy market.
With both blueprint projects now having achieved FID, the success of these initiatives highlights the effectiveness of the President’s strategic vision for Nigeria’s energy landscape.
Senator Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil), expressed his approval of the announcement, emphasizing that it reflects Nigeria’s continued attractiveness to investors.
In response to this development, Lokpobiri, through a statement from his Special Adviser on Media, Nneamaka Okafor, remarked that the announcement is in line with the federal government’s dedication to revitalizing Nigeria’s oil and gas sector through strategic reforms and investments.
This announcement from Shell clearly demonstrates the effectiveness of our policies. It highlights the confidence that investors have in the reforms and supportive environment being cultivated under President Bola Tinubu’s administration.
The project is anticipated to increase Nigeria’s production capacity by 110,000 barrels per day, generating substantial economic benefits for the country, he noted.
The minister has consistently reassured Nigerians that significant investment announcements would occur before the year's end.
The Shell Final Investment Decision (FID) is among several expected investments, as Lokpobiri reaffirmed the government's dedication to creating a conducive environment for business growth.
This represents just one of many investments we anticipate. The federal government is committed to addressing investor concerns, enhancing regulatory frameworks, and ensuring that the oil and gas sector remains attractive to global stakeholders.
Our objective is to leverage these investments to stimulate economic growth, generate employment, and elevate the living standards of Nigerians, the minister stated.
Lokpobiri praised Shell for its trust in Nigeria and assured the company of the government's backing to ensure the project's success.
Additionally, he stressed that further initiatives are in progress to maintain the momentum in attracting investments to the oil sector.
In a related statement, the Special Adviser to the President on Energy, Ms. Olu ArowoloVerheijen, remarked: The Bonga North FID dispels the myths surrounding International Oil Companies' exit from Nigeria. Instead, we are observing a strategic shift of IOCs towards deepwater and integrated gas projects, aligning with President Tinubu’s vision of establishing Nigeria as a global energy hub.
The divestments from onshore operations present opportunities for local oil and gas companies to grow and prosper, laying a robust foundation for Nigeria’s energy future.
Verheijen emphasized that the achievements of the Bonga North and Ubeta projects highlight the effectiveness of the reforms and initiatives promoted by the President. These developments are set to catalyze extensive investments aimed at transforming Nigeria’s power generation, transportation, and manufacturing industries. Looking towards 2025, we expect additional final investment decisions (FIDs) from both international and domestic stakeholders, heralding a new phase of growth and opportunity for Nigeria.
The statement also affirmed that the Tinubu administration is committed to establishing Nigeria as a global frontrunner in energy innovation and investment, ensuring that these initiatives yield concrete benefits for all citizens.
In a separate announcement from London, Shell expressed confidence that the asset would achieve a peak production of 110,000 barrels of oil per day, with the first oil expected by the end of the decade.
The project entails the drilling, completion, and initiation of 16 wells (comprising 8 production and 8 water injection wells), modifications to the existing Bonga Main FPSO, and the installation of new subsea equipment connected to the FPSO.
The multinational oil company stated that Bonga North is projected to have an estimated recoverable resource volume exceeding 300 million barrels of oil equivalent (boe) and aims to reach a peak production of 110,000 barrels of oil per day, with first oil anticipated by the decade's end.
"This represents another major investment that will help us sustain stable liquids production from our advantageous Upstream portfolio," remarked Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
The company noted that the investment in Bonga North is expected to yield an internal rate of return (IRR) above the threshold rate for Shell’s Upstream operations.
Additionally, several industry stakeholders have expressed enthusiasm regarding the announcement of the significant FID for the Bonga North project.
In an interview with THISDAY, Mr. Bank-Anthony Okoroafor, a former Chairman of the Petroleum Technology Association of Nigeria (PETAN) and Managing Director of CB Geophysical Solutions Limited, emphasized the need for similar Final Investment Decisions (FID) on other significant upstream projects by ExxonMobil, TotalEnergies, and others.
Okoroafor remarked, “This is a very encouraging development, one that should have been initiated many years ago. It is indeed a positive step, and I hope they can replicate this approach for other major projects.”
He pointed out, “This particular project is Bonga, associated with Shell. Total has additional projects in the pipeline, and ExxonMobil also has several major initiatives.”
“I am particularly focused on projects like Ntokong, Owowo, and other substantial ventures. We need to accelerate our efforts; we are running late in seizing these opportunities.”
He further noted that the project would generate significant opportunities for numerous service companies in areas such as engineering, equipment procurement, installation, commissioning, and ongoing services.
In a similar vein, Nigerian oil and gas contractors, represented by the Petroleum Contractors Trade Section (PCTS), hailed Shell’s significant Final Investment Decision (FID) on the 300 million barrels Bonga North project as a demonstration of the resilience and potential within Nigeria’s energy sector.
Rosario Osobase, Chairperson of PCTS, stated in an exclusive message to THISDAY, “The FID on Bonga North by Shell marks a pivotal advancement for Nigeria’s oil and gas industry.”
At PCTS, an organization dedicated to promoting sustainable growth within the industry, we view this decision as a strong affirmation of the resilience and potential inherent in the Nigerian energy sector.
She further emphasized that this initiative will enhance production capacity and signifies renewed confidence in the Nigerian oil and gas value chain. It is expected to generate significant opportunities for local contractors, increase local content participation, and contribute substantially to the nation's economic growth.
She stated that the initiative is expected to generate substantial opportunities for local contractors, increase local content involvement, and foster broader national economic development.
It highlights the need for continuous partnership among essential stakeholders—government, oil companies, and service contractors—in determining the future of energy in Nigeria.
Osobasen commended Shell for this bold initiative and expressed optimism regarding the beneficial effects it will have across the industry.