NNPC and its partners have advanced the $21bn Bonga offshore project with new agreements, moving the deepwater development closer to final investment decision

Nigeria’s Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners on Monday signed agreements to advance the proposed $15bn to $21bn Bonga Southwest/Aparo offshore project, bringing the major deepwater development closer to a Final Investment Decision.

Also read: Nigeria’s Reserves Surge $7.09bn to $52.66bn

The project, located in Oil Mining Lease 118, is expected to produce about 175,000 barrels of crude oil per day at peak output, alongside approximately 140 million standard cubic feet of gas per day.

The latest development represents an important step for Nigeria’s efforts to attract fresh capital into its deepwater oil and gas industry after years of relatively subdued investment in major offshore projects.

NNPC Ltd signed the agreements with the OML 118 contractor parties, comprising Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited.

The parties executed an Addendum to the OML 118 Production Sharing Contract and an Addendum to the Dispute Settlement Agreement.

According to NNPC, the agreements give effect to revised fiscal and commercial terms approved by the Federal Government for the Bonga Southwest/Aparo development.

The company said the changes were intended to create a more competitive framework for a project requiring billions of dollars in upfront investment and several years of development.

The NNPC Bonga offshore project is one of the most significant deepwater developments currently being advanced in Nigeria.

The partners said they had also completed the project’s Pre-Front End Engineering Design, or Pre-FEED, phase.

Completion of Pre-FEED work is designed to establish and refine the technical and commercial parameters needed before a project progresses into the more detailed Front End Engineering Design stage.

The partners said the work had helped mature the scope of Bonga Southwest/Aparo and positioned it for further engineering activities, subject to the necessary approvals and governance processes.

Another important development is the emergence of a preferred bidder for the project’s planned Floating Production, Storage and Offloading vessel.

The FPSO is expected to serve as the principal offshore facility for processing, storing and exporting crude produced from the development.

NNPC, however, stressed that selecting a preferred bidder does not constitute a final contract award.

The eventual Engineering, Procurement, Construction and Installation contract remains subject to partner, regulatory, assurance and other governance requirements.

The development nevertheless gives the project a clearer technical and commercial pathway towards FEED and, ultimately, a Final Investment Decision.

The latest agreements follow President Bola Ahmed Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026.

The Federal Government introduced the measure as part of wider efforts to improve the attractiveness of Nigeria’s fiscal framework for deepwater oil and gas developments.

Deepwater projects typically require enormous capital commitments, lengthy development periods and significant technical expertise. Investors therefore place considerable emphasis on the stability and competitiveness of the fiscal regime before committing billions of dollars.

NNPC said the Bonga agreements provided an early indication that the government’s reforms were beginning to translate into investment decisions and project activity.

NNPC Ltd Group Chief Executive Officer Bayo Ojulari described the development as evidence of the reforms’ impact.

“The execution of the BSWAp PSC and DSA Addenda demonstrates the effectiveness of President Tinubu’s reforms in translating policy into investment.”

Ojulari said the project represented an opportunity to unlock a major deepwater development while demonstrating that Nigeria could provide a competitive fiscal framework for long-term energy investment.

“NNPC Ltd will continue to work closely with the Federal Government, our partners and other stakeholders to ensure that this project delivers maximum value for the Federation and the Nigerian people,” he added.

NNPC Chief Corporate Communications Officer Andy Odeh said the agreements reinforced the government’s commitment to creating a stable environment for large-scale deepwater investment.

The Bonga Southwest/Aparo development could become one of the largest investments in Nigeria’s petroleum industry in recent years.

The estimated lifetime investment of between $15bn and $21bn would have implications beyond oil production.

The project is expected to generate additional government revenues and foreign exchange while creating opportunities for Nigerian companies involved in engineering, fabrication, marine services, logistics and offshore construction.

NNPC also expects the development to increase local content participation.

Indigenous suppliers and contractors could benefit from additional procurement and contracting opportunities, while the scale of the project could support the expansion of Nigeria’s fabrication, marine and engineering capabilities.

The company said the development could also contribute to technology transfer and skills development.

The project comes at a critical moment for Nigeria’s petroleum industry.

Although crude oil remains central to government revenues and foreign exchange earnings, the country’s oil sector has faced years of underinvestment, ageing infrastructure, production disruptions and uncertainty surrounding major capital projects.

Nigeria has consequently been seeking to increase production by attracting investment into existing assets while bringing new developments closer to production.

Deepwater fields are particularly important because they can provide substantial production volumes, but their development costs and long timelines make them highly sensitive to fiscal terms.

The government’s recent reforms are therefore aimed at improving Nigeria’s position in competition for international energy capital.

The Bonga Southwest/Aparo agreements offer a potentially powerful test of whether those changes can translate into large-scale project commitments.

At peak production, Bonga Southwest/Aparo is expected to deliver around 175,000 barrels of oil per day and 140 million standard cubic feet of gas per day.

That level of output would make the development a significant addition to Nigeria’s upstream production base.

The project could also provide a boost to domestic businesses if local content requirements result in meaningful participation by Nigerian engineering, construction, marine and oilfield service companies.

However, the project has not yet reached Final Investment Decision, and several technical, commercial, regulatory and governance stages remain.

The preferred FPSO contractor has yet to receive a final contract award, while the project must continue through FEED and other approval processes before full-scale development can proceed.

For Nigeria, the significance of Monday’s agreements therefore lies not only in the potential $21bn investment, but in the clearer path now emerging between fiscal reform, engineering preparation and eventual offshore production.

If the project reaches FID and progresses into construction, Bonga Southwest/Aparo could become a major new source of crude and gas production while providing a substantial boost to investment, local contracting and government revenues.

Also read: Nigeria’s Reserves Surge $7.09bn to $52.66bn

For now, NNPC and its partners have moved another important step closer to turning the long-planned deepwater development into a producing asset.