Key Points
- NNPC Ltd. and OML 118 contractor parties have signed agreements advancing the Bonga Southwest/Aparo deepwater project towards Final Investment Decision.
- The project could attract $15 billion to $21 billion in investment and reach peak production of 175,000 barrels of oil per day.
- The contractor parties have completed the Pre-FEED phase and identified a preferred FPSO contractor, subject to required approvals.
Main Story
The Nigerian National Petroleum Company Limited (NNPC Ltd.) and the contractor parties to Oil Mining Lease (OML) 118 have signed agreements aimed at advancing the Bonga Southwest/Aparo (BSWAp) deepwater project towards Final Investment Decision (FID).
The parties executed an Addendum to the OML 118 Production Sharing Contract (PSC) and an Addendum to the Dispute Settlement Agreement (DSA) at the NNPC Towers in Abuja on Monday.
The contractor parties involved are Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited (NAE).
The Group Chief Executive Officer of NNPC Ltd., Mr Bashir Ojulari, said the agreements give effect to fiscal and commercial terms approved by the Federal Government for the development of BSWAp.
He said the development demonstrated the government’s efforts to create a competitive and stable environment capable of attracting large-scale investment into Nigeria’s deepwater oil and gas sector.
According to Ojulari, the agreements followed President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026.
He described the order as an important part of the government’s reforms to improve the competitiveness of deepwater projects and encourage new investment in the sector.
Ojulari said the BSWAp agreements showed how the reforms were being translated into concrete project development.
The project is projected to become one of Nigeria’s largest deepwater developments, with estimated investment of between $15 billion and $21 billion over its lifespan.
At peak production, BSWAp is expected to produce 175,000 barrels of oil per day and 14 million standard cubic feet of gas daily.
The project is also expected to increase government revenue and foreign exchange earnings while creating opportunities for local businesses and workers.
Ojulari said NNPC Ltd. would continue working with the Federal Government, project partners and other stakeholders to ensure that the development delivers value to the Federation and Nigerians.
Meanwhile, the contractor parties announced the completion of the project’s Pre-Front End Engineering Design (Pre-FEED) phase.
The completion marks progress in defining the project’s technical and commercial scope and positions BSWAp to move into the FEED stage, subject to the required partner, assurance and governance processes.
The parties have also identified a preferred contractor for the project’s Floating Production Storage and Offloading (FPSO) facility following a competitive selection process.
However, the eventual award of the FPSO Engineering, Procurement, Construction and Installation (EPCI) contract remains subject to regulatory, partner, assurance and other required approvals.
Once operational, BSWAp is expected to become a major new deepwater production hub, increasing Nigeria’s oil output and supporting the government’s objective of growing oil and gas production sustainably.
The Issues
The signing of the PSC and DSA addenda removes an important contractual hurdle as the BSWAp project moves closer to FID.
The project’s scale means that its development could have significant implications for Nigeria’s oil production, government revenues and foreign exchange earnings, while also creating opportunities for domestic companies involved in engineering, fabrication, marine services and other parts of the supply chain.
The Federal Government’s new deepwater tax incentives are also central to the project’s commercial framework, with the agreements giving effect to the fiscal and commercial terms approved for BSWAp.
Beyond production, the project is expected to support Nigerian content through increased participation by indigenous companies, technology transfer, local fabrication and the development of technical and engineering skills.
What’s Being Said
“The PSC and DSA Addenda show the practical impact of these reforms in translating policy into project development.” — Bashir Ojulari, Group Chief Executive Officer, NNPC Ltd.
“BSWAp is projected to be one of Nigeria’s largest deepwater developments, with the potential to attract between 15 billion dollars and 21 billion dollars in investment over its lifespan and reach peak production of 175,000bpd and 14mscf of gas daily.” — Bashir Ojulari, Group Chief Executive Officer, NNPC Ltd.
What’s Next
The BSWAp project is expected to progress into the FEED phase following completion of the Pre-FEED stage, subject to the applicable partner, assurance and governance requirements.
The preferred FPSO contractor will also proceed towards the next stage of the process, although the EPCI contract cannot be formally awarded until all required partner, regulatory, assurance and governance approvals are completed.
The project will then move closer to FID as the technical, commercial and regulatory requirements are concluded.
Bottom Line
The execution of the OML 118 PSC and DSA addenda moves BSWAp closer to FID and gives effect to the Federal Government’s new deepwater investment incentives. If developed as planned, the project could bring up to $21 billion in investment and 175,000 barrels per day of peak oil production while expanding local content opportunities.
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