morganable business/energy& industry
The agreements were executed between NNPC Ltd and the OML 118 contractor parties, which include Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited.
KaNo—
Nigeria’s drive to revive large-scale investment in its deepwater oil sector gained significant traction on Monday as the Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners signed key agreements expected to move the proposed Bonga Southwest/Aparo (BSWAp) project closer to a Final Investment Decision (FID).
The development, estimated to attract between $15bn and $21bn in investment, is regarded as one of the most ambitious offshore oil and gas projects in Nigeria in recent years.
Located in Oil Mining Lease (OML) 118, the project is projected to produce about 175,000 barrels of crude oil per day at peak, alongside approximately 140 million standard cubic feet of gas daily.
The agreements were executed between NNPC Ltd and the OML 118 contractor parties, which include Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited.
Specifically, the parties signed an addendum to the OML 118 Production Sharing Contract (PSC) and an addendum to the Dispute Settlement Agreement (DSA), marking a critical milestone in advancing the project.
According to a statement issued by NNPC’s Chief Corporate Communications Officer, Andy Odeh, the agreements formalise the implementation of newly approved fiscal and commercial terms designed by the Federal Government to support the development of the Bonga Southwest/Aparo field.
“The Nigerian National Petroleum Company Limited and the OML 118 contractor parties today executed the addendum to the Production Sharing Contract and the addendum to the Dispute Settlement Agreement, marking a major milestone in the advancement of the Bonga Southwest/Aparo project towards Final Investment Decision,” the statement said.
It added that the execution of the agreements reflects Nigeria’s commitment to creating a competitive, stable, and attractive environment for large-scale deepwater investments, particularly at a time when global oil and gas capital is highly mobile and subject to intense competition among producing countries.
The milestone follows the recent approval by President Bola Tinubu of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026.
The policy aims to improve the fiscal attractiveness of Nigeria’s deepwater oil sector by offering incentives that address long-standing investor concerns over high costs and uncertain returns.
Industry analysts note that deepwater oil projects typically require substantial upfront capital investment and long development timelines, making fiscal stability and competitive tax regimes essential factors in securing investor commitment.
In recent years, Nigeria has struggled to attract major new investments in this segment, despite possessing some of Africa’s largest offshore hydrocarbon reserves.
“The execution of the BSWAp PSC and DSA addenda demonstrates the effectiveness of President Tinubu’s reforms in translating policy into investment,” Ojulari said.
“This is about unlocking a major deepwater project and demonstrating that Nigeria has a competitive fiscal framework and a clear pathway for sustainable investment in its energy sector.”he added.
NNPCL To Collaborate With Stakeholders
He added that NNPC would continue to collaborate with the Federal Government, project partners, and other stakeholders to ensure that the development delivers maximum economic value to the country.
Beyond the contractual agreements, the project partners also announced the successful completion of the Pre-Front End Engineering Design (Pre-FEED) phase.
This stage is critical in refining the technical and commercial aspects of the project before it advances to the more detailed Front End Engineering Design (FEED) phase.
According to the statement, the completion of the Pre-FEED work has helped to mature the project’s scope and position it for further engineering and investment decisions, subject to regulatory approvals and internal governance processes.
In another sign of progress, the partners disclosed that a preferred bidder has emerged for the Floating Production Storage and Offloading (FPSO) vessel required for the project.
The FPSO will serve as the central offshore facility for processing, storing, and exporting crude oil from the Bonga Southwest/Aparo field.
However, the NNPC clarified that the identification of a preferred bidder does not constitute a final contract award.
The selection remains subject to further approvals, including partner alignment, regulatory clearance, and assurance processes.
“The emergence of the preferred bidder provides a basis for advancing the FPSO concept into the FEED stage and for further technical and commercial maturation of the project,” the statement noted.
Bonga Project To Boost Oil Production
If fully developed, the Bonga Southwest/Aparo project is expected to significantly boost Nigeria’s oil production capacity and enhance its foreign exchange earnings.
The project is also anticipated to generate substantial revenue for the government through taxes, royalties, and profit oil.
In addition to its economic benefits, the development is projected to create extensive opportunities for Nigerian companies, particularly in engineering, fabrication, offshore construction, logistics, and support services. The NNPC emphasised that the project would deepen local content participation by increasing contracting opportunities for indigenous firms.
The company further noted that the project would contribute to the growth of local technical capabilities, facilitate technology transfer, and support skills development within the Nigerian workforce.
“The Bonga Southwest/Aparo development will strengthen local fabrication, marine, and engineering capabilities while providing opportunities for Nigerian professionals and service providers to participate in a major offshore project,” the statement added.
The latest progress comes as Nigeria intensifies efforts to reverse years of underinvestment in its oil and gas industry.
The government has in recent months introduced a series of fiscal and regulatory reforms aimed at attracting fresh capital, particularly in deepwater and frontier exploration areas.
As the project moves closer to a Final Investment Decision, stakeholders say sustained policy consistency, regulatory clarity, and efficient project execution will be critical to ensuring that the anticipated benefits are fully realised.
