NNPC signs agreements to advance $21bn Bonga Southwest deepwater project

The Nigerian National Petroleum Company Limited (NNPC Ltd) and contractors to the OML 118 Production Sharing Contract (PSC) have signed agreements to advance the Bonga Southwest/Aparo deepwater project, which is expected to attract between $15 billion and $21 billion in investment.

The agreements cover an addendum to the OML 118 PSC and an addendum to the Dispute Settlement Agreement (DSA).

The agreements were signed by NNPC Ltd and the project’s contractor parties, including Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited (NAE).

The development moves the project closer to a Final Investment Decision (FID) and gives effect to fiscal and commercial terms approved by the Federal Government.

Project targets 175,000 barrels per day

Bonga Southwest/Aparo is expected to become one of Nigeria’s largest deepwater developments if fully implemented.

The project is projected to attract between $15 billion and $21 billion over its lifecycle and reach peak production of approximately 175,000 barrels of crude oil per day.

It is also expected to produce about 140 million standard cubic feet of gas per day.

The project comes as Nigeria seeks to increase oil production and attract new capital into its upstream sector following years of declining investment in deepwater developments.

The latest agreements follow President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026.

The policy is part of the Federal Government’s broader efforts to improve the competitiveness of Nigeria’s deepwater sector and encourage new investments.

Bashir Bayo Ojulari, Group Chief Executive Officer of NNPC Ltd, said the agreements demonstrate the impact of the government’s reforms on investment.

He said the development would help unlock a major deepwater project while strengthening Nigeria’s position as a competitive destination for energy investment.

NNPC said it would continue working with the government, contractors and other stakeholders to move the project towards development.

Bonga Southwest completes Pre-FEED

The contractor parties have also completed the project’s Pre-Front End Engineering Design (Pre-FEED) phase.

The milestone means the project has matured its technical and commercial scope sufficiently to progress towards the Front End Engineering Design (FEED) phase, subject to the required partner, regulatory and governance approvals.

A preferred contractor has also been identified for the project’s Floating Production Storage and Offloading (FPSO) facility following a competitive selection process.

However, the selection does not constitute a final award.

The FPSO Engineering, Procurement, Construction and Installation (EPCI) contract remains subject to applicable approvals and governance requirements.

Beyond crude oil and gas production, the Bonga Southwest project is expected to create opportunities for Nigerian businesses across engineering, fabrication, offshore construction, logistics and operations.

NNPC said the development could also increase participation by indigenous companies, expand local fabrication and marine engineering capabilities, and support technology transfer and skills development.

Once operational, the project is expected to become a significant new deepwater production hub and contribute to Nigeria’s efforts to sustainably increase oil and gas output.

The immediate focus is now on completing the remaining engineering, commercial and approval processes needed to move Bonga Southwest/Aparo towards a final investment decision.