Shell’s investment in the Bonga North deep-water project, located off the coast of Nigeria, is expected to boost the country’s crude oil production by 100,000 barrels per day (bpd).
Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell plc, has announced its final investment decision (FID) on the Bonga North project.
The Bonga North oilfield, situated 130 kilometres offshore in Oil Mining Lease (OML) 118, represents a substantial $5 billion investment and is expected to yield approximately 350 million barrels of crude oil. Shell holds the largest operational interest in the project, with a 55 percent stake. Other partners include the Nigerian National Petroleum Corporation (NNPC), ExxonMobil, TotalEnergies, and Eni.
The Bonga North development will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility, in which Shell holds a 55 percent interest.
The project involves the drilling, completion, and start-up of 16 wells (eight production wells and eight water injection wells), modifications to the existing Bonga Main FPSO, and the installation of new subsea hardware connected to the FPSO.
This development will sustain oil and gas production at the Bonga facility. Bonga North has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and is expected to reach peak production of 110,000 barrels of oil per day, with first oil anticipated by the end of the decade.
Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, said: “This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio.”
Bonga North is expected to play a key role in ensuring Shell’s Integrated Gas and Upstream business continues to generate cash flow well into the next decade.
In a statement released on Monday, President Bola Ahmed Tinubu commended Shell for its investment, highlighting that it marks Nigeria’s first deep-water oil project in over a decade.
The President emphasised that this investment underscores the transformative impact of his administration in attracting investment to the country’s oil and gas sector.
President Tinubu remarked: “The Renewed Hope Agenda fundamentally focuses on attracting investments to transform the Nigerian economy and deliver prosperity to our people. We designed our policies and reforms from the start of my administration to achieve this goal. Shell and its partners’ decision to invest in Bonga North affirms the success of our efforts. We will continue to offer the necessary support to ensure their success and the realisation of Nigeria’s energy potential.”
In July 2023, during a series of high-level meetings with Shell’s global leadership, President Tinubu declared, “We are open for business and serious about creating a stable, predictable, and investor-friendly environment.”
Presidential directives issued in early 2024 further reinforced this commitment by fast-tracking regulatory approvals, reducing operational costs, and introducing competitive fiscal incentives.
The Bonga North project is the second of the blueprint projects selected by President Bola Ahmed Tinubu to drive the implementation of transformative Presidential Directives 40, 41, and 42, which were issued in the first quarter of 2024. These directives aim to enhance regulatory clarity, accelerate project timelines, and incentivise investment in Nigeria’s energy sector, and have already yielded significant results.
Earlier this year, the Ubeta oilfield (OML 58), the first blueprint project under this initiative, achieved FID through a partnership between TotalEnergies and NNPC Limited. Dormant since its discovery in 1965, the Ubeta project will produce 350 million standard cubic feet of gas per day, boosting domestic supply and expanding Nigeria’s presence in the global energy market.
With both blueprint projects now reaching FID, the success of these initiatives highlights the effectiveness of the President’s strategic vision for Nigeria’s energy future.
Ms. Olu Arowolo Verheijen, Special Adviser to the President on Energy, commented on the Bonga North milestone: “The Bonga North FID dispels misconceptions about International Oil Companies leaving Nigeria. Instead, we are witnessing a strategic pivot of IOC-powered capital and technical capacity towards deep-water and integrated gas projects, which align with President Tinubu’s vision of transforming Nigeria into a global energy hub. The divestments from onshore operations create opportunities for local oil and gas companies to expand and thrive, building a strong foundation for Nigeria’s energy future.”
Ms. Verheijen added: “The success of Bonga North and Ubeta demonstrates the efficacy of the reforms and directives championed by the President. These projects will trigger broader investments that will revolutionise Nigeria’s power generation, transportation, and manufacturing sectors. As we look ahead to 2025, we anticipate further FIDs from both international and domestic players, marking a new era of growth and opportunity for Nigeria.”