Shell Unveils Massive $20 Billion Investment Plan for Nigeria’s Bonga South West Deepwater Field
In a landmark announcement that signals renewed confidence in Nigeria’s energy sector, Shell Plc and its partners have revealed plans to invest $20 billion in the Bonga South West deepwater oil field, positioning it as one of the largest energy projects globally.
Shell Chief Executive Officer Wael Sawan made the announcement during a high-level meeting with President Bola Tinubu at the State House, explaining that the company is working toward a Final Investment Decision on the project. “We are indeed working on a project, Bonga South West, that could potentially, if we get to an FID stage, with the partners, invest around $20 billion foreign direct investment,” Sawan stated in a video shared by the country’s presidency.
The Bonga South West field, located in the deepwater region of Nigeria’s oil-producing Niger Delta, is estimated to hold 820 million barrels of reserves with a potential peak production capacity of 220,000 barrels per day. Of the total $20 billion investment, half would be allocated as capital expenditure, while the remaining half would cover operating expenses and other expenditures flowing into the country.
Shell holds the largest stake in the field, with other partners including ExxonMobil Corp., TotalEnergies SE, Eni SpA, and state-owned Nigerian National Petroleum Co. The project represents a dramatic shift in Shell’s Nigeria strategy, coming as the company prepares to exit onshore operations after decades of controversial activities in the Niger Delta.
Sawan credited President Tinubu’s leadership for creating an investment climate that has propelled Shell to deepen its commitment to Nigeria. “We are very keen to invest in Nigeria. But I’ll say this hasn’t always been the case. Your leadership has created an investment climate over the last few years that has propelled Shell to invest in Nigeria,” the CEO emphasized.
Highlighting Shell’s recent investments, including $5 billion in Bonga North, $2 billion in HI, and gas projects to NLNG, Sawan stated that the corporation remains committed to long-term investments in the country. “Stability in today’s environment will honestly have a premium for corporates because we are investing not for one administration or five or 10 years, we want to invest for 20, 30, 40 years and in the case of Nigeria, for many, many decades,” he explained.
The Shell CEO also revealed that the company has deepened its interest in Block OML 118, the Bonga Block, purchasing TotalEnergies’ stake to further consolidate its position. “Total Energies was selling, so we bought it because we want to deepen it further. But that, we think, is not enough. We think there is more to invest here, and we understand the vision that you have for the country,” Sawan added.
Sawan described Shell’s new commitments as a “sea change” from several years ago when the corporation was pulling back on investments in the country. He thanked President Tinubu for providing incremental incentives that have given Shell “line of sight to an investment in this project” and assured that the company will start the pre-FID process over the next few months.
At the meeting, President Tinubu approved the gazetting of targeted, investment-linked incentives to support the proposed Bonga South West deep offshore oil project and directed his Special Adviser on Energy, Mrs. Olu Verheijen, to facilitate the gazette of the incentives in line with Nigeria’s existing legal and fiscal frameworks.
The announcement comes as Shell paid $5.34 billion in taxes and other charges to Nigeria in 2024, more than to any other country. The payments increased from the previous year and came as the oil and gas giant prepares to leave Nigeria’s onshore production business after many decades of operations. Exiting onshore production in the Niger Delta, among Shell’s most emissions-intensive operations where the company is accused of causing widespread environmental pollution, is part of its effort to simplify its portfolio and become a net-zero energy business by 2050.
A Shell spokesperson confirmed that CEO Wael Sawan discussed various projects with President Tinubu, including Bonga South West, noting that the company will continue to invest in its upstream business in a disciplined way where the right opportunities arise.
Sources: worldoil.com, allafrica.com
