By Milcah Tanimu
Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc, announced a $5 billion Final Investment Decision (FID) for the Bonga North project. This marks Nigeria’s first deepwater investment since 2013 and has sparked optimism about Shell’s planned asset sales in the country.
Key Highlights of Shell’s Bonga North Project
- Production Capacity: The project aims to deliver 110,000 barrels of oil per day (bpd) at its peak, with recoverable resources estimated at 300 million barrels of oil equivalent.
- Timeline: Shell expects the first oil by the end of the decade.
- Infrastructure: The project involves drilling 16 wells, upgrading the Bonga FPSO (Floating Production, Storage, and Offloading) facility, and installing new subsea hardware.
Impact on Nigeria’s Oil and Gas Sector
This FID represents a major milestone in Nigeria’s energy sector and offers potential to unlock the value of Shell’s assets while attracting further investments. Welligence Energy Analytics noted that the approval signals progress for other deepwater developments, such as Preowei and Owowo.
Reactions from Industry Leaders
Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, emphasized the importance of the project. She stated, “This is another significant investment to maintain stable liquids production from our advantaged upstream portfolio.”
President Bola Tinubu praised Shell’s decision and attributed it to his administration’s energy policies and reforms. “Shell’s commitment to the Bonga North project underscores the confidence global players have in Nigeria’s oil and gas sector,” Tinubu said.
Future Prospects for Shell’s Divestment
Shell continues to shift focus from onshore operations in Nigeria to offshore projects and cleaner energy sources. Analysts believe the FID strengthens Shell’s position to finalize its asset sale to Renaissance, a consortium of Nigerian companies.
Bonga North: A Boost for Nigeria’s Oil Production
The development of the Bonga North field will significantly extend the life of the Bonga FPSO. This facility already manages output from the Bonga Main and Bonga North West fields. Engineers will modify the FPSO to accommodate the new production while a separate life-extension program sustains operations until 2029.
Fast Facts about Bonga
- Location: The Bonga fields lie in Nigeria’s OML 118 license, at water depths exceeding 1,000 meters.
- Partners: Shell operates the project with a 55% stake, alongside NNPC (state-owned), ExxonMobil, TotalEnergies, and Eni.
- Future Projects: The undeveloped Bonga South West field is set to produce 150,000 bpd at peak between 2027 and 2031, requiring its own FPSO.
