ABUJA – Nigerian President Bola Tinubu has approved a new framework of “investment-linked” incentives designed to accelerate the development of Shell Plc’s Bonga South West deepwater oilfield, a move aimed at ending years of stagnation for the $20 billion project. The announcement follows high-level talks in Abuja between the President and Shell CEO Wael Sawan, signaling a “sea change” in the regulatory environment of Africa’s largest crude producer.
The strategic push comes as the administration intensifies efforts to reverse declining production and attract high-value foreign direct investment through aggressive fiscal reforms. President Tinubu emphasized that the newly minted incentives are part of a broader strategy to restore investor confidence and secure a final investment decision (FID) for the offshore asset before the end of his current term.
“These incentives are not blanket concessions,” President Tinubu stated in a release from the State House. “They are ring-fenced and investment-linked, focused on new capital, incremental production, strong local content delivery, and in-country value addition.”
The Bonga South West project, located approximately 120km offshore in the Niger Delta, is estimated to hold nearly 800 million barrels of oil reserves. According to Shell’s Sawan, the project’s total investment could reach $20 billion, with half of that sum allocated to capital expenditure and the remainder to operating expenses and local spending. The CEO indicated that the company is targeting a 2027 window for a final investment decision, citing the improved investment climate under the current administration.
The renewed momentum at Bonga South West follows a successful 12-month period for Shell in Nigeria, during which the major committed $5 billion to the Bonga North development and $2 billion to the HI gas project. These investments, alongside Shell’s decision to increase its stake in the Bonga oilfield to 65% after exiting its onshore assets, underline a strategic pivot toward deepwater operations where regulatory and security risks are more manageable.
To ensure transparency and immediate impact, the President has directed the Special Adviser on Energy, Olu Arowolo Verheijen, to facilitate the official gazetting of these incentives. Industry analysts suggest that this targeted approach—leveraging the Petroleum Industry Act (PIA) and performance-based tax credits—could provide the necessary “line of sight” for Shell and its partners, including ExxonMobil, TotalEnergies, Eni, and the NNPC, to finally unlock one of the world’s most significant untapped energy projects.
