Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc’s recent $5 billion Final Investment Decision (FID) on the Bonga North project, has ignited optimism surrounding the multinational’s planned asset sale in Nigeria.
According to BusinessDay, Shell said in a statement on Monday that production will peak at about 110,000 barrels of oil per day, with 300 million barrels of oil equivalent recoverable from the area. The first oil is expected by the ‘end of the decade,’ according to Shell.
The multi-billion-dollar deep-water investment, the first 110,000 bpd project FID to be taken in Nigeria since the Egina field’s FID was announced in 2013, is seen as a positive step towards unlocking the value of Shell’s Nigerian assets and facilitating a smooth transition to new ownership.
Welligence Energy Analytics, a global market intelligence firm focused on the upstream oil and gas sector, on Monday, said the project will be a subsea tie-back to the existing Bonga Floating Production Storage and Offloading (FPSO), which is currently running at less than 60 percent capacity.
“This is Nigeria’s first deepwater FID in over a decade, following the announcement of deepwater capital incentives. Other undeveloped deepwater projects like Preowei and Owowo could progress soon,” Welligence said in a note seen by BusinessDay.
The newly sanctioned project involves drilling, completing, and starting up 16 wells (8 production, 8 water injection), modifications to the existing Bonga Main FPSO, and the installation of new subsea hardware tied back to the FPSO.
“This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio,” Zoë Yujnovich, Shell’s integrated gas and upstream director, said on Monday.
Olu Verheijen, President Bola Tinubu’s special adviser on energy, said the FID on Bonga North and the FID on Ubeta earlier in 2024 demonstrate the efficacy of the oil and gas reforms and directives championed by the President.
“These projects will trigger broader investments to revolutionise Nigeria’s power generation, transportation, and manufacturing sectors. In 2025 we anticipate further FIDs from international and domestic players,” Verheijen said.
President Tinubu has welcomed the FID by Shell and its partners for the Bonga North Deep Offshore Field.
According to a statement by Bayo Onanuga, the president’s special adviser on information and strategy, “The landmark development” marks Nigeria’s first deepwater oil venture in over a decade.
He attributed the development to the impact of Tinubu’s policies and reforms in drawing investments in the oil and gas sector.
“We designed our policies and reforms from the start of my administration to achieve this goal. Shell and its partners’ decision to invest in Bonga North affirms the success of our efforts. We will continue to offer the necessary support to ensure their success and the realisation of Nigeria’s energy potential,” Tinubu was quoted in the statement.
