President Bola Tinubu has given the green light to a special fiscal incentive package that could unlock around $20 billion in foreign direct investment for Nigeria's oil and gas sector through the long-stalled Bonga Southwest Aparo deepwater project.
The approval, announced by the Nigerian National Petroleum Company Limited (NNPC) on Tuesday, clears major hurdles that have delayed the offshore development for nearly two decades.
It paves the way for partners, led by Shell Nigeria Exploration and Production Company (a Shell plc subsidiary), to reach the crucial Final Investment Decision (FID) the first such decision for a deepwater Production Sharing Contract asset in Nigeria since 2008.
The project, part of the broader Bonga field complex in the Niger Delta, is expected to deliver significant output once operational: approximately 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas daily.
It is also projected to create more than 5,000 direct and indirect jobs across the oil and gas value chain.The fiscal incentives include an enhanced production tax credit and resolution of a 2021 dispute settlement agreement.
These measures aim to boost investor confidence, balance national revenue interests with competitive returns, and address past fiscal and contractual challenges amid global energy shifts.
The decision follows intensive negotiations involving NNPC, the Nigeria Revenue Service, Special Adviser to the President on Energy Olu Verheijen, and Shell CEO Wael Sawan.
It aligns with President Tinubu's earlier directive to accelerate conditions for the project's advancement.
Bayo Ojulari, Group Chief Executive Officer of NNPC Limited, hailed the milestone as a turning point.
“This approval is a testament to the President’s leadership, NNPC’s disciplined execution, and our ability to structure complex, bankable transactions that deliver value for Nigeria," he said.
"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.”
The move supports the Federal Government's wider goal of attracting over $100 billion in new sector investments by 2030, focusing on deepwater exploration, gas, and infrastructure under reforms from the Petroleum Industry Act.
It signals renewed potential for Nigeria's offshore basins, which have historically been highly productive but slowed by regulatory issues, costs, and energy transition pressures.
With the incentives now in place, stakeholders anticipate swift progress toward FID and eventual development of this major upstream initiative.
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