Tinubu approves Bonga Southwest fiscal incentives to unlock $20bn investment and revive Nigeria’s deepwater oil exploration

Nigerian President Bola Tinubu has approved a targeted fiscal incentive package designed to unlock the long-delayed Bonga Southwest Aparo deepwater oil project, a move expected to attract about 20 billion dollars in foreign direct investment into Nigeria’s energy sector.

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The approval was announced on Tuesday by Nigerian National Petroleum Company Limited, which said the policy decision would help pave the way for the long-awaited Final Investment Decision on the offshore development.

The Bonga Southwest Aparo project is operated by Shell Nigeria Exploration and Production Company, a subsidiary of Shell plc, in partnership with a consortium of international oil companies and Nigeria’s national oil company.

Industry officials say the project represents one of the most significant upstream investments planned in Nigeria in recent years and could provide a powerful boost to deepwater exploration, which has slowed amid fiscal uncertainties and global energy transition pressures.

According to NNPC Limited, the presidential approval followed months of negotiations involving key stakeholders, including the National Revenue Service, the Special Adviser to the President on Energy, Olu Verheijen, and the Chief Executive Officer of Shell plc, Wael Sawan.

In a statement signed by the Chief Corporate Communications Officer of NNPC Limited, Andy Odeh, the company described the decision as a significant milestone aimed at restoring investor confidence in Nigeria’s deepwater petroleum assets.

The fiscal framework approved by President Bola Tinubu includes an enhanced production tax credit and the resolution of the 2021 dispute settlement agreement, measures intended to create a more competitive investment climate while safeguarding Nigeria’s long-term revenue interests.

NNPC said the decision followed extensive technical and commercial engagements aimed at resolving long-standing fiscal and contractual issues that had delayed the project’s development for nearly two decades.

Reacting to the development, the Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, described the approval as a turning point for the long-stalled offshore investment.

“This approval is a testament to the President’s leadership, NNPC’s disciplined execution, and our ability to structure complex, bankable transactions that deliver value for Nigeria,” Bayo Ojulari said.

The NNPC chief noted that the project had remained stalled for nearly 20 years but had now regained momentum through policy clarity and sustained engagement with industry partners.

According to the national oil company, the Bonga Southwest Aparo project will become Nigeria’s first Final Investment Decision on a deepwater Production Sharing Contract asset since 2008, potentially signalling renewed investor interest in offshore exploration.

Once operational, the project is expected to produce about 150,000 barrels of crude oil per day and approximately 140 million standard cubic feet of gas daily, significantly boosting Nigeria’s hydrocarbon output.

Officials also estimate that the development could generate more than 5,000 direct and indirect jobs across different segments of the oil and gas value chain.

The project forms part of the Federal Government’s broader strategy to attract large-scale investment into Nigeria’s energy industry.

Authorities have said the country is targeting more than 100 billion dollars in new oil and gas investments by 2030, particularly in deepwater exploration, gas development and energy infrastructure.

Deepwater projects typically require substantial capital commitments and long development timelines, making fiscal stability and regulatory certainty critical factors for international investors.

The Bonga Southwest Aparo development, located offshore in the Niger Delta, is expected to build on the success of the original Bonga field, which began production in 2005 and became Nigeria’s first deepwater oil project.

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With the fiscal framework now approved, NNPC Limited and its partners are expected to move toward the Final Investment Decision that will trigger the multi-billion-dollar capital commitment required to develop the offshore field.