Tinubu Approves Fiscal Incentives to Unlock $20bn Bonga Southwest Oil Project
President Bola Ahmed Tinubu has approved a package of fiscal incentives aimed at enabling the long-delayed Bonga Southwest Aparo (BSWA) deepwater oil project to reach its Final Investment Decision (FID), a move expected to attract about $20 billion in foreign investment into Nigeria’s energy sector.
The approval was announced on Tuesday in a statement issued by Andy Odeh, spokesperson for Nigerian National Petroleum Company Limited (NNPC Ltd). The company said the policy measure is intended to unlock investment in the offshore project and support broader efforts to stimulate economic growth and strengthen Nigeria’s energy industry.
According to the statement, the Bonga Southwest Aparo project is expected to usher in a new phase of deepwater oil production in the country while drawing significant foreign direct investment.
The presidential approval followed months of technical and commercial discussions involving NNPC Ltd as concessionaire, the National Revenue Service, the President’s Special Adviser on Energy, Olu Verheijen, and executives of Shell Plc.
The project gained renewed momentum earlier this year when Shell’s Chief Executive Officer, Wael Sawan, led a delegation to meet President Tinubu in Abuja in January.
During the meeting, the company signalled a stronger commitment to investing in Nigeria, citing improvements in political stability, policy consistency, and regulatory direction as factors strengthening investor confidence.
Shell executives noted that large-scale energy investments typically span between 20 and 40 years, making stability and policy clarity critical to long-term project planning.
Following the engagement, the president authorised the gazetting of targeted, investment-linked incentives designed to support the Bonga Southwest project and similar offshore developments.
Located about 120 kilometres off the Niger Delta coast in waters roughly 1,000 metres deep, the Bonga field remains Nigeria’s first deepwater oil development. The facility, which achieved first oil in 2005, has the capacity to produce up to 225,000 barrels of crude oil per day and 150 million cubic feet of gas daily.
NNPC Ltd said the new fiscal framework includes an enhanced Production Tax Credit and measures addressing issues from the 2021 dispute settlement agreement, with the aim of creating a competitive environment that balances national revenue with investor returns.
The Group Chief Executive Officer of NNPC Ltd, Bashir Ojulari, described the approval as a significant step toward unlocking a project that had remained stalled for nearly two decades.
He said the development reflects the administration’s reform agenda and demonstrates the company’s capacity to structure complex investment arrangements capable of attracting global capital.
If approved by project partners, the Bonga Southwest development would represent the first Final Investment Decision for a Nigerian deepwater Production Sharing Contract asset since 2008, potentially restoring the country’s appeal as a destination for offshore oil investments.
The project is projected to generate over 5,000 direct and indirect jobs and produce about 150,000 barrels of crude oil per day along with roughly 140 million standard cubic feet of natural gas daily once operational.
The Nigerian government has recently intensified efforts to revitalise the energy sector as part of broader economic reforms aimed at improving energy security and boosting national revenue.
However, the expansion of oil and gas exploration continues to attract scrutiny from environmental advocates, particularly in the Niger Delta, where decades of oil production have been associated with pollution and environmental degradation.
Shell Petroleum Development Company of Nigeria Limited has faced multiple legal challenges over environmental damage in the region.
In 2021, a court in the Netherlands ruled that the company must compensate Nigerian farmers affected by oil spills, marking a notable decision in long-running environmental litigation.
Investigations in recent years have also highlighted continued hydrocarbon pollution in oil-producing communities such as Ogoniland, where residents reliant on farming and fishing have reported losing access to farmland and waterways following repeated oil spills linked to pipeline and operational failures.
With the latest approval secured, NNPC Ltd and its partners are expected to proceed toward the Final Investment Decision for the Bonga Southwest Aparo project, potentially triggering one of the largest offshore oil investments in Nigeria in recent years.
