A subsidiary of Shell Plc in the Federal Republic of Nigeria, SNEPCo, has announced its final investment decision (FID) for the Bonga North deepwater project off the Nigerian coast.
The project, which will help maintain oil and gas production at Bonga, will be connected to Shell’s Floating Production Storage and Offloading (FPSO) facility, where the oil major holds a 55% stake.
According to Shell, Bonga North has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach peak production of 110,000 barrels of oil per day (boepd), with first oil expected by the end of the decade.
In a statement issued on Monday, December 16, 2024, the oil company said the project would involve drilling, completing, and commissioning of 16 wells, comprising eight production wells and eight water injection wells.
Additionally, modifications will be made to the existing Bonga Main FPSO, alongside the installation of new subsea infrastructure connected to the facility.
Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, described the development as a critical investment.
“This is another significant step towards maintaining stable liquids production from our advantaged upstream portfolio,” she stated.
Meanwhile, Nigerian President Bola Ahmed Tinubu has praised Shell Nigeria Exploration and Production Company (SNEPCo) and its partners for their FID on the Bonga North Deepwater Project, marking Nigeria’s first deepwater oil development in over a decade.
A statement from the presidency issued by Bayo Onanuga, Special Adviser to the President on Information and Strategy, welcomed SNEPCo’s decision to invest $5 billion in the West African nation, which is expected to produce an estimated 350 million barrels of crude oil.
The Bonga North oilfield, located 130 kilometres offshore in Oil Mining Lease (OML) 118, is operated by Shell with a 55% stake, in partnership with NNPC Limited, ExxonMobil, TotalEnergies, and Eni.
The statement emphasised that the FID demonstrates the success of his administration’s efforts to create a more competitive and investor-friendly environment.
“The Renewed Hope Agenda fundamentally focuses on attracting investments to transform the Nigerian economy and deliver prosperity to our people,” the statement said.
“Shell and its partners’ decision to invest in Bonga North affirms the effectiveness of our policies and reforms. We will continue to support their success and the realisation of Nigeria’s energy potential,” it added.
The statement further mentioned that “The FID on Bonga North signals renewed confidence in Nigeria’s energy sector and underscores the Tinubu administration’s commitment to fostering a robust and competitive investment climate,” he added.
Ms. Olu Arowolo Verheijen, Special Adviser to the President on Energy, has underscored the significance of the Bonga North FID, calling it a pivotal moment that challenges prevailing misconceptions about international oil companies (IOCs) exiting Nigeria.
Verheijen remarked, “The Bonga North FID dispels the misconceptions about international oil companies leaving Nigeria. Instead, we are witnessing a strategic pivot of IOC-powered capital and technical capacity to deepwater and integrated gas projects, which align with President Tinubu’s vision of transforming Nigeria into a global energy hub.”
She further explained that while IOCs are divesting from onshore operations, this transition creates opportunities for indigenous oil and gas companies to grow and thrive.
“These divestments are building a strong foundation for Nigeria’s energy future,” she said, adding that this shift enhances local participation in the energy sector while enabling IOCs to focus on high-value offshore and gas projects.
Verheijen further lauded the success of the Bonga North and Ubeta projects as clear evidence of the effectiveness of the Tinubu administration’s reforms.
“These achievements demonstrate the efficacy of the President’s directives in unlocking capital and enabling projects that will not only sustain production but also drive broader investments across Nigeria’s economy,” Verheijen stated.
She mentioned how the projects are set to revolutionize critical sectors, including power generation, transportation, and manufacturing, through expanded energy availability and infrastructure development.
Looking ahead, Verheijen expressed confidence in a wave of additional Final Investment Decisions from both international and domestic players.
She described this as heralding a new era of growth for Nigeria’s energy industry.
“The success of Bonga North and Ubeta is just the beginning. We anticipate further FIDs in the coming year, marking a transformative period of growth and opportunity for Nigeria’s energy sector and economy,” she concluded.
Source: https://energynewsafrica.com