Tinubu Approves Fiscal Incentives to Unlock $20bn Bonga Deepwater Oil Project
- President Tinubu has approved fiscal incentives for an FID on the Bonga Southwest deepwater oil project
- NNPC Limited said the project could attract about $20 billion in foreign direct investment
- The project will be Nigeria’s first deepwater production sharing contract asset to reach FID since 2008
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
President Bola Tinubu has approved a targeted fiscal incentive aimed at enabling the long-delayed Final Investment Decision (FID) on the Bonga Southwest Aparo deepwater oil project.
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This was disclosed in a statement issued on Tuesday, March 10 by the Nigeria National Petroleum Company Limited, and signed by its Chief Corporate Communications Officer, Andy Odeh.
The approval is expected to unlock about $20 billion in foreign direct investment and boost Nigeria’s deepwater oil production capacity.
Tinubu's approval informed by discussions
The national oil company explained that the presidential approval followed months of technical and commercial discussions involving NNPC Limited, the Nigeria Revenue Service, the Special Adviser to the President on Energy, Olu Verheijen, and the Chief Executive Officer of Shell, Wael Sawan.
The development came after Tinubu directed relevant stakeholders to fast-track the processes needed to move the project toward its investment decision stage.
Commenting on the approval, the Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, described it as a breakthrough for Nigeria’s energy sector.
Reforms removed obstacles to Bonga project
Ojulari said the project had been stalled for nearly two decades but noted that recent policy reforms and sustained engagement with partners had helped remove key obstacles.
“This approval demonstrates the President’s leadership and our ability to structure complex investment frameworks that deliver value for the country,” he said.
NNPC stated that the Bonga Southwest Aparo project will be the first deepwater production sharing contract asset in Nigeria to reach the FID stage since 2008.
The approved fiscal package includes an enhanced production tax credit and the resolution of issues related to the 2021 dispute settlement agreement, measures the company said were designed to make the project more competitive for investors.
The national oil firm added that it worked closely with Shell Nigeria Exploration and Production Company and other project partners to develop fiscal solutions that address structural challenges while safeguarding Nigeria’s long-term economic interests.
Source: Twitter
Bonga Deepwater to produce 150,000 bpd
Once fully developed, the project is expected to produce about 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas daily.
NNPC said the development could also generate more than 5,000 direct and indirect jobs while strengthening Nigeria’s position as a destination for deepwater oil and gas investment.
NNPC announces new oil well discovery
Legit.ng earlier reported that the NNPC announced a fresh new oil well discovery after a successful drilling exercise in the western Niger Delta.
The new oil well exploration was carried out by Chevron, and there is excitement that it will boost government revenue.
The national oil company said the discovery supports its strategy to increase crude output and strengthen energy security
Source: Legit.ng
