Tinubu Approves Fiscal Incentives to Unlock $20bn Bonga Deepwater Oil Project

President Bola Ahmed Tinubu has approved a set of fiscal incentives aimed at unlocking the long-delayed Bonga Southwest Aparo (BSWA) deepwater oil project, a development expected to attract about $20 billion in foreign direct investment (FDI) into Nigeria’s energy sector.

The approval clears a major hurdle toward reaching the Final Investment Decision (FID) on the project, which is being developed by NNPC Limited in partnership with Shell plc.

Industry officials say the project will mark a significant milestone for Nigeria’s deepwater oil industry once the FID is achieved.

Negotiations behind the approval

The presidential approval followed months of negotiations involving NNPC Limited, the Nigeria Revenue Service, and the Office of the Special Adviser to the President on Energy led by Olu Verheijen.

Discussions also involved Wael Sawan, as part of broader efforts to unlock stalled investments in Nigeria’s deepwater segment.

According to officials, the approval followed an earlier directive by President Tinubu to fast-track key enablers required to move the strategic project to the Final Investment Decision stage. The directive came after a courtesy visit by the Shell CEO to the President where both parties explored ways to revive delayed deepwater investments.

NNPC reacts

Reacting to the development, the Group Chief Executive Officer of NNPC Limited, Bashir Bayo Ojulari, described the approval as a major breakthrough after nearly two decades of delays.

“For nearly two decades, the Bonga Southwest project remained stalled. Today, under President Tinubu’s reform-driven leadership and through NNPC’s sustained advocacy, we have broken that logjam. This is what partnership, persistence, and policy clarity can achieve,” Ojulari said.

He added that the milestone demonstrates NNPC’s commitment to unlocking Nigeria’s energy potential through strategic partnerships and disciplined project execution.

Details of the fiscal incentives

The fiscal package approved by the President includes an enhanced Production Tax Credit as well as the resolution of issues linked to the 2021 dispute settlement agreement.

Officials say the measures are designed to create a more competitive fiscal framework for deepwater investments while balancing national revenue interests with investor returns.

NNPC Limited, as concessionaire, worked closely with Shell Nigeria Exploration and Production Company and other project partners to develop fiscal solutions capable of addressing structural constraints affecting the project.

First deepwater FID since 2008

Industry sources say the Bonga Southwest project could become Nigeria’s first Final Investment Decision on a deepwater Production Sharing Contract asset since 2008, potentially restoring the country’s position as a major destination for deepwater investments.

The project is expected to produce about 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas daily when completed.

It is also projected to create more than 5,000 direct and indirect jobs across the oil and gas value chain.

Implications for Nigeria’s oil sector

With presidential approval secured, NNPC Limited and its partners are expected to proceed toward the Final Investment Decision, which will trigger the multi-billion-dollar capital investment required for the project.

Industry analysts say the development signals renewed investor confidence in Nigeria’s evolving energy policy framework, particularly following ongoing reforms aimed at attracting capital into the country’s oil and gas sector.

Once approved by project partners, the Bonga Southwest Aparo development is expected to significantly boost Nigeria’s deepwater production capacity and support long-term growth in the energy sector.