Nigeria’s oil and gas sector could be on the verge of a major investment revival following a new policy move by the Federal Government aimed at unlocking one of the country’s most anticipated offshore petroleum developments.
President Bola Ahmed Tinubu has approved a targeted fiscal incentive framework designed to revive the long-delayed Bonga Southwest Aparo offshore oil project, a development expected to attract about $20bn in foreign direct investment into Nigeria’s energy sector.
The decision marks a significant policy intervention intended to address longstanding investment bottlenecks that have delayed the project for nearly two decades.
Industry stakeholders say the approval could signal a turning point for deepwater petroleum exploration in Nigeria, particularly at a time when global investors are becoming increasingly cautious about committing capital to large-scale oil developments.
Tinubu approves incentives to unlock $20bn Bonga deepwater project
The Tinubu approves incentives to unlock $20bn Bonga deepwater project initiative is expected to clear the path for the long-awaited Final Investment Decision (FID) on the offshore field, which has remained stalled due to regulatory uncertainties, fiscal concerns and shifting global investment priorities.
The Bonga Southwest Aparo project is operated by Shell Nigeria Exploration and Production Company, a subsidiary of Shell plc, in partnership with international oil companies and the national oil firm, Nigerian National Petroleum Company Limited.
According to a statement released by NNPC Limited, the presidential approval followed months of negotiations involving key stakeholders across Nigeria’s energy and fiscal policy institutions.
These discussions included engagement with the Federal Inland Revenue Service as well as consultations with the President’s Special Adviser on Energy, Olu Verheijen, and the Chief Executive Officer of Shell plc, Wael Sawan.
The negotiations focused on designing a fiscal framework capable of making the project commercially viable while protecting Nigeria’s long-term revenue interests.
The incentive package approved by the President includes an enhanced production tax credit and the resolution of the 2021 dispute settlement agreement that had previously complicated the project’s investment structure.
NNPC Limited described the development as a strategic step toward restoring investor confidence in Nigeria’s deepwater oil assets.
In a statement signed by the Chief Corporate Communications Officer of the company, Andy Odeh, the firm said the new fiscal structure would create a competitive investment environment capable of attracting large-scale capital inflows into the sector.
Industry observers say Nigeria’s deepwater petroleum sector has struggled in recent years to attract new investments due to regulatory uncertainty and rising project costs.
Several multinational energy companies have slowed new offshore investments globally as energy transition policies and environmental concerns reshape the future of fossil fuel development.
However, Nigerian officials believe that the country’s vast offshore reserves still offer significant commercial opportunities for global investors.
Reacting to the development, the Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, described the presidential approval as a critical milestone in the effort to revive the stalled project.
According to him, the Bonga Southwest Aparo development had remained inactive for nearly two decades despite its enormous economic potential.
Ojulari noted that the project’s revival reflects the impact of policy clarity and strategic collaboration between government institutions and international energy partners.
He added that unlocking the project demonstrates the Federal Government’s commitment to attracting long-term investment into Nigeria’s petroleum sector through stable and investor-friendly policies.
Once operational, the Bonga Southwest Aparo field is expected to produce approximately 150,000 barrels of crude oil per day, alongside about 140 million standard cubic feet of natural gas daily.
Energy analysts say this level of production could significantly boost Nigeria’s hydrocarbon output and strengthen government revenues derived from the petroleum sector.
The project is also expected to generate more than 5,000 direct and indirect jobs across different segments of the oil and gas value chain.
These include employment opportunities in offshore construction, drilling operations, logistics, engineering services and supply chain activities.
Beyond employment, experts believe the investment could stimulate broader economic activity through increased demand for local goods and services.
Nigeria’s deepwater oil basins have historically been among the most productive offshore petroleum zones in Africa.
Fields such as the Bonga Oil Field, Erha Oil Field and Agbami Oil Field have played key roles in sustaining Nigeria’s crude oil production over the past two decades.
The Bonga Southwest Aparo development, located offshore in the Niger Delta region, is expected to build on the success of the original Bonga field, which began commercial production in 2005.
However, new deepwater projects in Nigeria have slowed significantly in recent years due to regulatory reforms, investment uncertainties and the evolving global energy landscape.
Industry experts say securing the Final Investment Decision on the Bonga Southwest Aparo project could therefore send a strong signal to international investors about Nigeria’s commitment to improving the investment climate in the energy sector.
The Federal Government has set ambitious targets for attracting large-scale investments into the country’s oil and gas industry.
Officials say Nigeria aims to secure more than $100bn in new energy investments by 2030, focusing particularly on deepwater exploration, natural gas development and energy infrastructure expansion.
With the fiscal framework now approved, NNPC Limited and its partners are expected to move toward finalising the investment decision that will trigger the multibillion-dollar capital deployment required to develop the offshore field.
If successfully implemented, the project could mark the beginning of a new wave of investment in Nigeria’s offshore petroleum sector.
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