Nigeria’s President Bola Ahmed Tinubu has approved a targeted fiscal incentive package to unlock the long-delayed Bonga Southwest Aparo (BSWA) deepwater oil project, expected to attract around US$20 billion in investment, the Nigerian National Petroleum Company Limited (NNPC Ltd) said Tuesday.
The decision marks a major milestone for Nigeria’s energy sector, positioning the country for a new phase of deepwater oil production and signalling renewed investor confidence in the government’s reform-driven policy environment.
Long-awaited investment decision
The presidential approval follows months of negotiations involving NNPC, the National Revenue Service, the Special Adviser to the President on Energy Olu Verheijen, and Shell Plc executives, including CEO Wael Sawan.
Shell’s top management had met Tinubu in Abuja in January to discuss expanding investment in Nigeria’s deepwater oil sector. At the meeting, Sawan cited improved policy consistency, political stability, and leadership as factors encouraging Shell to accelerate its planned investments.
“The President has approved a targeted fiscal incentive designed to unlock the Final Investment Decision on the Bonga Southwest Aparo project, marking a milestone in Nigeria’s ongoing drive to attract strategic investments and accelerate sustainable economic growth,” said Andy Odeh, NNPC’s Chief Corporate Communications Officer.
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Strategic deepwater project
The Bonga field, located about 120 kilometres off the Niger Delta coast in 1,000 metres of water, was Nigeria’s first deepwater oil development, achieving first oil in 2005. It currently produces up to 225,000 barrels of crude per day and 150 million cubic feet of gas per day.
The new Bonga Southwest Aparo project is expected to produce roughly 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas per day, creating over 5,000 direct and indirect jobs during construction and operations.
If realised, it will be the first Final Investment Decision on a Nigerian deepwater Production Sharing Contract asset since 2008, potentially restoring the country’s appeal as a major destination for deepwater oil investments.
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Fiscal incentives and investor framework
The presidential package includes an enhanced Production Tax Credit and the resolution of a 2021 dispute settlement agreement, aimed at creating a competitive framework that balances national interests with investor returns.
NNPC said the package was carefully structured to overcome structural barriers while protecting Nigeria’s long-term fiscal interests. “This represents the culmination of the President’s directive to fast-track the enablers required to move this strategic national asset to FID,” NNPC Group CEO Bashir Ojulari said, noting the project had remained stalled for nearly two decades.
Economic benefits and sector reforms
Authorities say the Bonga Southwest project could strengthen Nigeria’s energy security, boost government revenue, and accelerate economic growth. The development is part of a wider effort to revitalise the oil and gas sector through policy reforms, improved governance, and structured investment partnerships.
Analysts describe the approval as a landmark moment, signalling to international oil companies that Nigeria is open for long-term, large-scale investments.
Environmental and social concerns
Environmental groups, however, have raised concerns over renewed exploration in the Niger Delta, a region historically plagued by oil pollution. Communities in Ogoniland and across the Niger Delta continue to suffer from hydrocarbon contamination affecting farmland and waterways, leading to lawsuits against Shell in European courts.
A Dutch court in 2021 ordered Shell to pay compensation to Nigerian farmers for environmental damage, highlighting the persistent challenges of balancing energy development with ecological protection.
Despite these concerns, the government maintains that responsible energy development is crucial to Nigeria’s economic growth and fiscal stability.
With presidential approval secured, NNPC and its partners are expected to advance toward the Final Investment Decision, triggering a multi-billion-dollar capital investment poised to reshape Nigeria’s deepwater oil production landscape.
