Shell Announces $5 Billion Investment in Nigeria’s Bonga North Project

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Shell Nigeria Exploration and Production Company Limited (SNEPCo) has taken a significant step in the Nigerian oil industry by announcing a $5 billion Final Investment Decision (FID) for the Bonga North project, marking the country’s first deep-water oil project since 2013. This development is seen as a beacon of optimism, especially in light of Shell’s ongoing plans to divest its onshore assets in Nigeria.

According to Shell’s statement released on Monday, the Bonga North project is expected to peak at an output of about 110,000 barrels of oil per day, with recoverable resources estimated at 300 million barrels of oil equivalent. The first oil from this project is anticipated by the end of the decade. This investment will involve the drilling of 16 wells, modifications to the existing Bonga Main FPSO, and the installation of new subsea hardware.

The project is a subsea tie-back to the existing Bonga Floating Production Storage and Offloading (FPSO), which has been operating below capacity. Welligence Energy Analytics noted that this FID not only revitalizes the Bonga field but could also pave the way for other deepwater projects like Preowei and Owowo, which have been in limbo due to the lack of capital commitment.

Zoë Yujnovich, Shell’s integrated gas and upstream director, emphasized, “This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio.”

The approval of this project also reflects positively on the Nigerian government’s recent policy reforms. Olu Verheijen, special adviser on energy to President Bola Tinubu, stated, “These projects will trigger broader investments to revolutionize Nigeria’s power generation, transportation, and manufacturing sectors. In 2025, we anticipate further FIDs from international and domestic players.” President Tinubu has hailed this development as a testament to his administration’s efforts to attract investment into the oil and gas sector.

The Bonga North project is expected to extend the operational life of the Bonga field, which currently produces from the Bonga Main and Bonga North West fields. The modifications to the FPSO will be mostly limited to the topsides to accommodate the new production from Bonga North.

Shell operates the project with a 55% stake, alongside partners ExxonMobil, TotalEnergies, and Eni, holding 20%, 12.5%, and 12.5% respectively. Located within the OML 118 license, the Bonga fields are in waters deeper than 1,000 meters.

This FID also sends a strong signal regarding Shell’s confidence in its divestment strategy. With regulatory hurdles still in play for its onshore asset sale to Renaissance, a consortium of five mostly Nigerian companies, this move is interpreted by energy analyst Dolapo Akinola as Shell’s optimism about the deal’s success. “Shell has been vocal about its intention to shift focus towards cleaner energy sources and higher-margin offshore developments,” said Akinola.

The Bonga North project not only underscores Nigeria’s potential in deepwater oil exploration but also highlights the strategic shifts in Shell’s global operations, focusing on offshore high-value projects amid a broader move towards sustainable energy solutions.