Nigeria Eyes Fresh $21bn Investment, 175,000bpd Production From Bonga Southwest Project

Nigeria is targeting up to $21bn in investment and peak production of about 175,000 barrels per day (bpd) from the Bonga Southwest/Aparo deepwater project as the Federal Government moves to unlock one of the country’s largest new offshore developments.

The project took a major step towards Final Investment Decision (FID) on Monday following the execution of addenda to the OML 118 Production Sharing Contract (PSC) and Dispute Settlement Agreement (DSA) between the Nigerian National Petroleum Company Limited (NNPC Ltd) and the OML 118 contractor parties.

The contractor parties comprise Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited (NAE).
The agreements give effect to fiscal and commercial terms approved by the Federal Government for the development of the Bonga Southwest/Aparo project, while providing a framework for the partners to advance the project towards FID.

The NNPC Ltd said on Monday that the project is expected to attract between $15bn and $21bn in investment over its life, with peak production estimated at about 175,000bpd of oil and 140 million standard cubic feet per day (mmscfd) of gas.

The development is expected to boost Nigeria’s oil and gas output, government revenues and foreign exchange earnings, while creating opportunities for local contractors, suppliers and service companies.

The milestone comes after President Bola Ahmed Tinubu approved the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which forms part of the Federal Government’s efforts to improve the competitiveness of Nigeria’s deepwater oil and gas sector.

The government has positioned the fiscal reforms as measures aimed at attracting fresh capital into deepwater projects that require significant upfront investment and have long development cycles.

Commenting on the development, Group Chief Executive Officer of NNPC Ltd, Bashir Ojulari, said the execution of the agreements demonstrated the impact of the government’s reforms on investment decisions.’

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

“This is about unlocking a major deepwater project and demonstrating that Nigeria has a competitive fiscal framework and a clear pathway for sustainable investment in its energy sector.”

He added that NNPC would continue working with the Federal Government, its partners and other stakeholders to ensure that the project delivers value to the country.

The project has also advanced technically, with the contractor parties announcing the completion of the Pre-Front End Engineering Design (Pre-FEED) phase.

The completion marks a significant step in defining the technical and commercial scope of the development and positions the project to move into the Front End Engineering Design (FEED) phase, subject to the required partner, assurance and governance approvals.

A preferred contractor for the project’s Floating Production Storage and Offloading (FPSO) facility has also been identified following a competitive selection process.

However, the selection remains subject to applicable partner, regulatory, assurance and governance processes.

The eventual award of the Engineering, Procurement, Construction and Installation (EPCI) contract for the FPSO is also subject to the completion of all required approvals.

Once developed, Bonga Southwest/Aparo is expected to become one of Nigeria’s most significant new deepwater production hubs and contribute to efforts to sustain and increase national crude oil production.

The project is also expected to generate significant economic activity beyond crude oil production, with billions of dollars in capital investment potentially flowing into engineering, fabrication, offshore construction, logistics and operations.

The development is expected to deepen local content participation by increasing contracting opportunities for Nigerian companies and expanding demand for indigenous engineering, marine, fabrication and support services.

It could also facilitate technology transfer and skills development while creating direct and indirect employment opportunities across the oil and gas value chain.

The project is being advanced amid Nigeria’s broader efforts to reverse declining investment in the upstream oil sector and attract capital into new oil and gas developments.

Deepwater projects have historically required substantial capital commitments and long development periods, making fiscal certainty and commercial terms critical considerations for investors and international oil companies.

The execution of the OML 118 PSC and DSA addenda therefore represents a key commercial milestone, particularly as the partners work towards FID and the next stages of engineering and project development.

The Federal Government expects the investment to strengthen production capacity while generating additional government revenues and foreign exchange at a time when Nigeria continues to seek greater stability in its external and fiscal position.

The project’s expected gas output of 140mmscfd could also contribute to Nigeria’s broader efforts to increase domestic gas availability and support industrial and power-sector development.

NNPC said the Bonga Southwest/Aparo development reflects collaboration between the national oil company, the Federal Government, regulators and the OML 118 contractor parties.

With the commercial agreements now executed, completion of Pre-FEED and a preferred FPSO contractor identified, the project is moving into another critical phase as the partners undertake further engineering and commercial work required to reach FID.