Nigeria’s Deepwater Oilfield Revival Gains Momentum
Nigeria has taken a significant step forward in reviving investment in its deepwater oilfields. On Monday, the Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners signed agreements that are expected to bring the Bonga Southwest/Aparo project closer to a Final Investment Decision (FID). This ambitious project is estimated to attract up to $21 billion in investment and could become one of the country’s largest new deepwater developments.
The Bonga Southwest/Aparo project is located in Oil Mining Lease 118 and is projected to produce about 175,000 barrels of oil per day and 140 million standard cubic feet of gas per day at peak production. The project involves key players such as Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited.
Key Agreements Signed
The NNPC Ltd and the OML 118 Contractor Parties executed an Addendum to the OML 118 Production Sharing Contract and an Addendum to the Dispute Settlement Agreement. These agreements formalize new fiscal and commercial terms approved by the Federal Government to support the development of the Bonga Southwest/Aparo project.
This development is particularly important for Nigeria, which has faced challenges in securing major investments in its deepwater petroleum sector despite possessing some of Africa’s largest offshore oil and gas resources. Unlike onshore and shallow-water operations, deepwater projects require substantial upfront capital and long-term fiscal certainty, making the competitiveness of a country’s tax and commercial framework a crucial factor for international investors.
Impact of Policy Reforms
The latest agreements demonstrate the practical impact of the Federal Government’s recent reforms aimed at restoring Nigeria’s attractiveness as a destination for deepwater investment. According to a statement from the NNPC Ltd, these agreements give effect to the fiscal and commercial terms approved by the government to support the development of the BSWAp.
The milestone followed President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, designed to improve the competitiveness of Nigeria’s deepwater fiscal regime and unlock fresh investments. The execution of the addenda shows how these policy reforms are beginning to translate into concrete project development.
Project Milestones
Speaking on the development, the Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, emphasized that the agreements provide evidence that the Federal Government’s reforms are creating a pathway for major investments that had remained uncertain. He stated, “The execution of the BSWAp PSC and DSA Addenda demonstrates the effectiveness of President Tinubu’s reforms in translating policy into investment.”
The project partners also announced the successful completion of the Pre-Front End Engineering Design (Pre-FEED) phase, another step towards taking the proposed development into the more detailed Front End Engineering Design stage. The completion of the Pre-FEED work helped mature the technical and commercial scope of the project and positioned it for further engineering activities, subject to approvals and other governance requirements.
FPSO Development
In another indication that preparations for the project are advancing, the partners said a bidder had emerged as the preferred contractor for the Floating Production Storage and Offloading (FPSO) vessel planned for the Bonga Southwest/Aparo development. The FPSO is expected to be the central offshore facility for processing, storing, and exporting crude oil from the field.
However, the NNPC and its partners stressed that the identification of the preferred bidder did not amount to a final contract award. The selection was still subject to the completion of “applicable partner, regulatory, assurance and governance processes,” while any eventual Engineering, Procurement, Construction and Installation contract would require further approvals.
Economic and Social Benefits
With an estimated lifetime investment of between $15 billion and $21 billion, the Bonga Southwest/Aparo project could rank among the biggest investments in Nigeria’s oil and gas industry in years. Beyond its projected crude oil and gas output, the project is expected to generate additional government revenues and foreign exchange, while creating opportunities for Nigerian companies involved in engineering, fabrication, offshore construction, logistics, and other services.
The NNPC said the development would also deepen local content participation through increased contracting opportunities for indigenous companies and suppliers. It added that the project was expected to strengthen local fabrication, marine and engineering capabilities, facilitate technology transfer, and support skills development.
Future Prospects
The latest development comes as Nigeria seeks to reverse years of underinvestment in its oil and gas industry and raise crude production through new investments in both existing and frontier assets. The Federal Government and industry regulators have introduced a series of fiscal and regulatory measures aimed at attracting fresh capital into the petroleum sector, particularly in deepwater projects where investment decisions are often influenced by global competition and the long development cycle of offshore fields.
Once operational, the Bonga Southwest/Aparo project is expected to become a major new production hub and contribute to Nigeria’s ambition to sustainably increase its oil and gas output.
Collaborative Efforts
The NNPC said the signing of the agreements reflected collaboration among the Federal Government, the national oil company, regulatory agencies, and the OML 118 Contractor Parties. It added that it would continue to work with all stakeholders to advance the project “safely, competitively and responsibly, while maximising value for Nigeria and the Nigerian people.”
