NNPC, Shell, Agip seal fresh agreement to advance $15bn Bonga South West project

The Nigerian National Petroleum Company (NNPC) Limited and contractors under Oil Mining Licence (OML) 118 have signed addenda to the OML 118 Production Sharing Contract (PSC) and the Dispute Settlement Agreement (DSA).

The agreements were executed on Monday, according to a statement issued by NNPC spokesperson, Andy Adeh.

The OML 118 contractor parties involved are Shell Nigeria Exploration and Production Company (SNEPCo) Limited, Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration (NAE) Limited.

The development marks an agreement between NNPC and the participating oil companies on amendments to the existing contractual and dispute settlement arrangements governing OML 118 operations.

NNPC said the development marks a major milestone in advancing the deepwater Bonga South West/Aparo (BSWAp) project towards a final investment decision (FID), adding that the project is expected to attract about $15 billion.

The milestone followed the approval of the deep offshore oil and gas projects incentives (tax remission) order, 2026, by President Bola Tinubu.

NNPC said the execution gives effect to the fiscal and commercial terms approved by the federal government to support the development of BSWAp.

The company added that the agreements reinforce Nigeria’s commitment to creating a competitive, stable and attractive environment for large-scale deepwater investments.

“The BSWA PSC and DSA Addenda demonstrate the practical impact of these reforms in translating policy into investment and project development,” NNPC said.

“BSWAp is expected to be one of Nigeria’s largest deepwater developments, with the potential to attract US$15 billion to US$21 billion in investment over the life of the project and achieve peak production of about 175 kbopd of oil and 140 mmscfd of gas.

“The development is expected to contribute significantly to Nigeria’s economy through increased oil and gas production, government revenues, foreign exchange earnings, local content development, employment and expanded opportunities for Nigerian businesses.”

CONTRACTORS ANNOUNCE SUCCESSFUL COMPLETION OF PRE-FEED PHASE

NNPC said the contractor parties also announced the successful completion of the project’s pre-front end engineering design (Pre-FEED) phase.

NNPC said the milestone marks an important step in maturing the technical and commercial scope of the development and positioning the project to progress into the FEED phase, subject to applicable partner, assurance and governance requirements.

“Following a competitive selection process, a bidder has been identified as the preferred Floating Production Storage and Offloading (FPSO) contractor for the BSWA project, subject to completion of applicable partner, regulatory, assurance and governance processes,” the company said.

“The selection provides a basis for progressing the FPSO concept into FEED and for undertaking the further engineering and commercial work required to mature the project towards FID.

“Any eventual award of the FPSO Engineering, Procurement, Construction and Installation (EPCI) contract remains subject to the completion of all applicable approvals and requirements.”

NNPC said once operational, BSWAp is expected to become one of Nigeria’s most significant new deepwater production hubs, contributing to national oil production and supporting the country’s ambition to sustainably grow oil and gas output.

“The project is expected to deliver substantial benefits to Nigeria through billions of dollars of investment, increased participation by Nigerian contractors and suppliers, and significant direct and indirect employment opportunities across engineering, fabrication, offshore construction, logistics and operations,” the company said.

Speaking on the milestone, Bayo Ojulari, group chief executive officer (GCEO) of NNPC, said the execution of the BSWAp PSC and DSA addenda demonstrates the effectiveness of Tinubu’s reforms in translating policy into investment.

“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 said.

Ojulari added that NNPC 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”.

Follow Very Nigerian WhatsApp Channel
For Verified Breaking News, Exclusive Reports, Trending Stories, And Real-time Updates.
CLICk HERE TO JOIN!