President Tinubu Greenlights Strategic Incentives for Shell's Bonga Oil Development
In a significant move to bolster Nigeria's energy sector, President Bola Tinubu has officially approved the gazetting of targeted, investment-linked incentives specifically designed to support Shell's proposed Bonga South West deep-offshore oil project and similar offshore developments. This strategic decision aims to attract fresh capital while safeguarding government revenues, marking a pivotal step in Nigeria's economic revitalization efforts.
Structured Incentives to Drive Investment and Economic Growth
According to a statement released by the Special Adviser to the President on Media & Public Communication, Sunday Dare, these carefully structured incentives are not blanket concessions. Instead, they are tied strictly to new investments, increased production, robust local content participation, and value addition within Nigeria. The presidency emphasized that this approach is intended to create jobs, boost foreign exchange inflows, and expand Nigeria's industrial capacity without eroding fiscal stability.
President Tinubu has directed the Special Adviser on Energy, Mrs. Olu Verheijen, to ensure the incentives are formally gazetted in alignment with Nigeria's existing legal and fiscal frameworks. This procedural step underscores the administration's commitment to regulatory clarity and policy consistency, which are critical for restoring investor confidence.
Tinubu's Clear Expectations and Economic Vision
While receiving a high-level delegation from Shell led by its Global Chief Executive Officer, Wael Sawan, President Tinubu articulated his clear expectation that the Bonga South West project must reach a Final Investment Decision within the first term of his administration, effectively setting a deadline before the 2027 elections. He described the deep-offshore project as strategically vital to Nigeria's economy, highlighting its potential to generate thousands of direct and indirect jobs, attract substantial foreign exchange inflows, and provide steady government revenue over its operational lifespan.
The president also noted that the project would significantly expand Nigerian participation in key sectors such as offshore engineering, fabrication, logistics, and energy-related services, thereby enhancing local content development and technological transfer.
Shell's Confidence and Recent Investments in Nigeria
In response, Shell's CEO, Wael Sawan, acknowledged that Nigeria's investment environment has improved markedly under the Tinubu administration. He expressed growing confidence in the country's long-term investment prospects, citing recent economic and energy-sector reforms as positive indicators. The delegation included senior executives from Shell's global and Nigerian leadership teams, reflecting the company's serious commitment to the Nigerian market.
President Tinubu disclosed that Shell and its partners have invested nearly $7 billion in Nigeria over the past 13 months, particularly in the Bonga North and HI projects. He described these investments as tangible evidence that the administration's reforms are yielding results, reinforcing Nigeria's position as an attractive destination for large-scale energy investments.
Broader Context and Future Prospects
This development follows earlier reports of Shell's plans to invest $2 billion in Nigeria's HI offshore gas field in OML 144, located in the Niger Delta. That project, which represents the second-largest investment commitment in two years, is expected to expand Nigeria's LNG production by producing 350 million standard cubic feet of gas per day by 2028. The government has welcomed these investments as a sign of renewed investor confidence and a testament to the effectiveness of recent policy adjustments.
Overall, President Tinubu's approval of incentives for the Bonga South West project underscores a strategic focus on leveraging Nigeria's oil and gas resources to drive economic growth, create employment opportunities, and enhance foreign exchange earnings, all while maintaining fiscal discipline and regulatory transparency.
