President Tinubu Greenlights Fiscal Package for Bonga Southwest Deepwater Oil Project
President Bola Tinubu has approved a targeted fiscal incentive package aimed at enabling the long-delayed Final Investment Decision (FID) on the Bonga Southwest Aparo deepwater oil project. This strategic move, disclosed by the Nigeria National Petroleum Company Limited (NNPC) in a statement issued on Tuesday, March 10, is expected to unlock approximately $20 billion in foreign direct investment while significantly boosting Nigeria's deepwater oil production capacity.
Months of Technical and Commercial Discussions Precede Approval
The presidential approval followed extensive technical and commercial discussions involving multiple key stakeholders. NNPC Limited explained that these negotiations included representatives from the Nigeria Revenue Service, the Special Adviser to the President on Energy, Olu Verheijen, and Shell's Chief Executive Officer, Wael Sawan. This development came after President Tinubu directed relevant stakeholders to accelerate the processes necessary to move the project toward its crucial investment decision stage.
Bayo Ojulari, the Group Chief Executive Officer of NNPC Limited, described the approval as a "breakthrough for Nigeria's energy sector." He emphasized that the Bonga Southwest project had been stalled for nearly two decades, but recent policy reforms and sustained engagement with partners had successfully removed key obstacles. "This approval demonstrates the President's leadership and our ability to structure complex investment frameworks that deliver value for the country," Ojulari stated.
Project Details and Economic Impact
NNPC confirmed that the Bonga Southwest Aparo project will represent Nigeria's first deepwater production sharing contract asset to reach the FID stage since 2008. The approved fiscal package includes:
- An enhanced production tax credit
- Resolution of issues related to the 2021 dispute settlement agreement
These measures were specifically designed to make the project more competitive for international investors while safeguarding Nigeria's long-term economic interests.
Once fully developed, the project is projected to produce approximately 150,000 barrels of crude oil per day along with 140 million standard cubic feet of gas daily. Beyond energy production, NNPC estimates the development could generate more than 5,000 direct and indirect jobs while strengthening Nigeria's position as a premier destination for deepwater oil and gas investment.
Collaborative Development and Strategic Importance
The national oil firm worked closely with Shell Nigeria Exploration and Production Company and other project partners to develop fiscal solutions that address structural challenges. This collaborative approach followed months of negotiations involving NNPC, Shell, and various stakeholders, reflecting the project's complexity and strategic importance to Nigeria's energy future.
This development comes alongside other positive news for Nigeria's energy sector, as NNPC recently announced a fresh oil well discovery following a successful drilling exercise in the western Niger Delta. Carried out by Chevron, this new exploration is expected to further boost government revenue while supporting NNPC's strategy to increase crude output and strengthen national energy security.
