.Plans output expansion by 110,000 bpd
.As Tinubu celebrates, says investment is milestone for nation’s energy sector
UGO AMADI
Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell plc, has announced a final investment decision (FID) on Bonga North, a deep-water project off the coast of Nigeria. Bonga North will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility which Shell operates with a 55% interest.
The Bonga North project involves drilling, completing, and starting up 16 wells (8 production and 8 water injection wells), modifications to the existing Bonga Main FPSO and the installation of new subsea hardware tied back to the FPSO.
The project will sustain oil and gas production at the Bonga facility. Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day, with first oil anticipated by the end of the decade.
“This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
Bonga North will help ensure Shell’s leading Integrated Gas and Upstream business continues to drive cash generation into the next decade.
SNEPCo (55%) operates the Bonga field in partnership with Esso Exploration and Production Nigeria Ltd. (20%), Nigerian Agip Exploration Ltd. (12.5%), and TotalEnergies Exploration and Production Nigeria Ltd. (12.5%), on behalf of the Nigerian National Petroleum Company Limited (NNPC).
Bonga is a deep-water development located in OML 118, at water depths exceeding 1,000 meters. Production at the Bonga FPSO began in 2005, with a capacity to produce 225,000 barrels of oil per day. The project produced its one-billionth barrel of crude oil in 2023.
The Bonga North development holds estimated recoverable resource volumes of more than 300 million barrels of oil equivalent (boe). These volumes are currently classified as 2P (proven and probable) under the Society of Petroleum Engineers’ Petroleum Resources Management System.
The estimated peak production and recoverable resources mentioned above are 100% total gross figures.
The investment in Bonga North is expected to generate an internal rate of return (IRR) in excess of the hurdle rate for Shell’s Upstream business.
Shell’s Upstream business continues to set new benchmarks in performance through near-field opportunities like Bonga North, leveraging technical expertise, strong partnerships, and a model built on simplification and replication.
However, President Bola Ahmed Tinubu welcomes Shell and its partners’ announcement of the Final Investment Decision (FID) on the Bonga North Deep Offshore Field. This landmark development, Nigeria’s first deepwater oil project in over a decade, underscores the transformative impact of the President’s policies and reforms in attracting investments in the oil and gas sector.
The Bonga North oilfield, located 130 kilometres offshore in Oil Mining Lease (OML) 118, represents an impressive estimated $5 billion investment and is expected to yield approximately 350 million barrels of crude oil. Shell holds the largest operational interest, with 55%. Its other partners are the Nigerian National Petroleum Corporation (NNPC), ExxonMobil, TotalEnergies, and Eni.
The FID signals renewed confidence in Nigeria’s energy sector and demonstrates the effectiveness of the Tinubu administration’s strategic focus on engendering a robust and competitive investment climate.
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.”
President Tinubu’s strategic engagement with global energy stakeholders has been instrumental in this renewed wave of investments.
In July 2023, at the first of several 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 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 President Bola Ahmed Tinubu selected to drive the implementation of the transformative Presidential Directives 40, 41, and 42 issued in the first quarter of 2024.
These directives, aimed at enhancing regulatory clarity, accelerating project timelines, and incentivising investment in Nigeria’s energy sector, have yielded remarkable results. Earlier this year, the Ubeta oilfield (OML 58), the first blueprint project under this initiative, achieved a Final Investment Decision (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, bolstering domestic supply and expanding Nigeria’s presence in the global energy market.
With both blueprint projects now achieving FID, the success of these initiatives underscores 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 the misconceptions about International Oil Companies leaving Nigeria. Instead, we are witnessing a strategic pivot of IOCs-powered capital and technical capacity to deepwater 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 further noted: “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 to revolutionise Nigeria’s power generation, transportation, and manufacturing sectors. As we look ahead to 2025, we anticipate further FIDs from international and domestic players, marking a new era of growth and opportunity for Nigeria.”
The Tinubu administration remains steadfast in positioning Nigeria as a global leader in energy innovation and investment, ensuring that these efforts translate into tangible benefits for all Nigerians.
