Nigeria Targets $21bn Investment, 175,000bpd From Bonga

Nigeria is targeting up to $21 billion in investment and peak production of about 175,000 barrels of crude oil per day from the Bonga Southwest/Aparo deepwater project.

The development took a major step towards final investment decision on Monday, following the execution of addenda to the OML 118 production sharing contract and dispute settlement agreement between the Nigerian National Petroleum Company Limited (NNPCL) and the project’s contractor parties.

The contractor parties comprise Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited (NAE).

According to NNPCL,the agreements give effect to fiscal and commercial terms approved by the federal government for the development of the Bonga Southwest/Aparo project and provide a framework for the partners to progress towards FID.

The national oil company said the project was expected to attract between $15 billion and $21 billion in investment over its life.

It added that the project could achieve peak production of about 175,000 barrels per day of crude oil and 140 million standard cubic feet per day (mmscfd) of gas.

The development is expected to increase Nigeria’s oil and gas production, government revenues and foreign exchange earnings, while creating opportunities for local contractors, suppliers and service providers.

The milestone follows President Bola Ahmed Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, as part of efforts by the federal government to improve the competitiveness of the country’s deepwater oil and gas sector.

The government has described the fiscal reforms as measures aimed at attracting fresh capital into deepwater projects, which typically require huge upfront investments and lengthy development periods.

Commenting on the development, NNPC Group Chief Executive Officer, Bashir Ojulari, said the execution of the agreements demonstrated the impact of the administration’s reforms on investment decisions.

“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.”

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Ojulari added that NNPCL would continue to work with the federal government, its partners and other stakeholders to ensure the project delivers value to the country.

The project has also recorded technical progress, with the contractor parties completing the pre-front end engineering design phase.

The completion of this phase is expected to pave the way for the front end engineering design phase, subject to the required partner, assurance and governance approvals.

A preferred contractor for the project’s Floating Production Storage and Offloading (FPSO) facility has also been identified following a competitive selection process.

However, the selection remains subject to applicable partner, regulatory, assurance and governance processes.
The eventual award of the Engineering, Procurement, Construction and Installation (EPCI) contract for the FPSO will also require the completion of all necessary approvals.

Once developed, the Bonga Southwest/Aparo project is expected to become one of Nigeria’s major new deepwater production hubs and contribute to efforts to increase and sustain national crude oil production.

Beyond oil production, the project is expected to generate significant economic activity through engineering, fabrication, offshore construction, logistics and operations.

It is also expected to increase local content participation by creating more contracting opportunities for Nigerian companies and boosting demand for indigenous engineering, marine, fabrication and support services.

The development could further facilitate technology transfer and skills development while generating direct and indirect employment across the oil and gas value chain.

The project is being advanced amid the Federal Government’s broader efforts to reverse declining investment in Nigeria’s upstream oil sector and attract fresh capital into new oil and gas developments.

Deepwater projects have historically required substantial capital commitments and long development timelines, making fiscal certainty and commercially competitive terms critical considerations for investors and international oil companies.

The execution of the OML 118 PSC and DSA addenda therefore represents a major commercial milestone as the partners move towards FID and subsequent stages of engineering and project development.

The Federal Government expects the investment to strengthen Nigeria’s production capacity while generating additional revenue and foreign exchange amid ongoing efforts to improve fiscal and external stability.

The project’s projected gas output of 140mmscfd could also support Nigeria’s efforts to increase domestic gas supply for industrial and power-sector development.

With the commercial agreements executed, Pre-FEED completed and a preferred FPSO contractor identified, the Bonga Southwest/Aparo project is now entering another critical phase ahead of the partners’ final engineering, commercial and governance processes required to reach FID.