Shell touts progress on potential $20bn Bonga South West oilfield in Nigeria

By Wendell Roelf

Nigerian President Bola Tinubu has approved “investment-linked” incentives for Shell’s Bonga South West deepwater oilfield after a meeting with the company’s CEO Wael Sawan, who flagged a possible green light for the $20bn project in 2027.

The proposed incentives are the latest in a raft of regulatory reforms in Africa’s top crude oil producer as it looks to attract investment to boost oil and gas production.

“These incentives are not blanket concessions,” Tinubu said in a statement late on Thursday.

He said the incentives will be ring-fenced and focused on new capital, incremental production and strong local content delivery. His office did not give further details on what form they would take.

“My expectation is clear: Bonga South West must reach a final investment decision within the first term of this administration,” Tinubu added.

Nigerian President Bola Tinubu, who is embarking on the country's biggest reforms in decades to tackle issues such as a high debt burden, scrapped the fuel subsidy when he took office at the end of May. — Nigerian President Bola Tinubu. Picture: Temilade Adelaja/Reuters (REUTERS/Temilade Adelaja/ File photo.)

INVESTMENT DECISION LIKELY IN 2027

Shell’s Sawan said he hoped to take Bonga South West to a final investment decision in 2027, which could mean about $20bn in investments from Shell and its partners, according to a video shared on LinkedIn by the president’s special energy adviser, Olu Arowolo Verheijen.

Half of that would be capital and the other half would come from operating expenses and other spending, Sawan said, adding Shell was also interested in Nigeria’s exploration licence round.

In the past 12 months Shell had invested $5bn in Bonga North and $2bn in the HI gas project feeding into Nigeria LNG, Sawan said.

Shell took a final investment decision on the Bonga North development in 2024 as it sought to maintain output at its linked Bonga floating production, storage and offloading facility.

Last year Shell acquired a stake from TotalEnergies that raised its share in the Bonga oilfield to 65%, underlining its continued interest in offshore Nigeria production after it sold its onshore assets. Other shareholders of Bonga include units of Exxon Mobil and ENI.

Reuters