FG Targets $21bn Investment, 175,000bpd From Bonga Southwest Project

Bonga Southwest Project Targets $21bn Investment, 175,000bpd Peak Output

The Federal Government is targeting between $15 billion and $21 billion in investment from the development of the Bonga Southwest/Aparo (BSWAp) deepwater oil project, with peak production projected at about 175,000 barrels per day.

The project moved closer to a Final Investment Decision (FID) on Monday after the Nigerian National Petroleum Company Limited (NNPC Ltd) and the contractor parties under Oil Mining Lease (OML) 118 signed addenda to the Production Sharing Contract (PSC) and Dispute Settlement Agreement (DSA).

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Bonga Southwest Moves Towards Final Investment Decision

The agreements were signed by NNPC Ltd and the OML 118 contractor parties, comprising Shell Nigeria Exploration and Production Company Limited (SNEPCo), Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited (NAE).

According to NNPC, the agreements give effect to fiscal and commercial terms approved by the Federal Government for the development of the project and provide the framework for advancing Bonga Southwest/Aparo towards FID.

The development represents a significant step for one of Nigeria’s major proposed deepwater oil projects, which has the potential to attract substantial long-term capital into the country’s upstream sector.

Project Targets 175,000 Barrels Per Day

Bonga Southwest/Aparo is expected to reach peak production of about 175,000 barrels of crude oil per day once fully developed.

The project is also projected to produce about 140 million standard cubic feet of gas per day (mmscfd), providing an additional source of gas supply alongside its crude oil production.

The scale of the expected output could strengthen Nigeria’s upstream production capacity at a time when the Federal Government is seeking to increase crude production and attract new investment into mature and deepwater assets.

Federal Government Uses New Incentives to Attract Investment

The latest progress follows President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026.

The measure forms part of the Federal Government’s efforts to improve the competitiveness of Nigeria’s deepwater oil and gas sector and encourage investors to commit capital to projects that require substantial upfront expenditure and long development timelines.

Deepwater developments typically require significant investment in offshore infrastructure, engineering, production facilities and logistics. More competitive fiscal conditions can therefore influence investors’ decisions on whether to proceed with major projects.

Pre-FEED Stage Completed

The Bonga Southwest/Aparo project has also recorded technical progress, with the contractor parties completing the Pre-Front End Engineering Design (Pre-FEED) stage.

The project is expected to proceed towards the Front End Engineering Design (FEED) phase, subject to the necessary partner, assurance and governance approvals.

A preferred contractor has also been identified for the Floating Production Storage and Offloading (FPSO) facility following a competitive selection process. However, the selection remains subject to the required regulatory, partner and governance approvals.

The eventual Engineering, Procurement, Construction and Installation (EPCI) contract for the FPSO will also depend on completion of the applicable approval processes.

Project Could Increase Government Revenue

The Federal Government expects the development to increase Nigeria’s oil and gas production and generate additional government revenue.

Higher crude production could also support foreign exchange earnings, particularly if the project reaches its projected production levels and operates consistently.

NNPC said the project could generate opportunities for Nigerian contractors, suppliers and service companies across areas including engineering, fabrication, offshore construction, logistics and marine services.

Local Content Could Benefit From Development

The scale of the Bonga Southwest project could also create opportunities for greater participation by Nigerian businesses in the oil and gas supply chain.

Major offshore projects require a broad range of services and technical expertise, creating potential demand for local engineering companies, fabrication firms, logistics operators and other suppliers.

The project is also expected to support employment, skills development and technology transfer as development activities expand.

For the wider construction and industrial sectors, increased activity around major energy projects can create demand for supporting infrastructure, specialised services and materials.

Gas Production Could Support Power and Industry

The projected 140mmscfd gas output adds another dimension to the project.

Additional gas production could support Nigeria’s domestic gas supply, with potential applications in power generation and industrial activities.

Reliable gas supply remains important to Nigeria’s power and manufacturing sectors, making new upstream gas production relevant beyond the petroleum industry.

However, the actual economic benefit will depend on how effectively the additional production connects with domestic gas infrastructure and markets.

Investment Could Support Nigeria’s Broader Economy

The expected $15 billion to $21 billion investment represents a significant potential inflow of capital into Nigeria’s economy.

Beyond direct oil production, the project could stimulate activity across engineering, construction, marine logistics, fabrication, professional services and other areas of the energy value chain.

The project’s progression also comes as Nigeria seeks to rebuild investor confidence in its upstream sector and reverse years of declining investment in new oil developments.

Implications for Infrastructure and Property Development

Large-scale energy investments can have wider implications for infrastructure and real estate in locations that support project operations.

As investment increases, demand for accommodation, commercial facilities, logistics services and other supporting infrastructure can rise around project-related economic activity.

For the property sector, the effect is likely to depend on the location and scale of supporting activities generated by the project rather than the offshore development itself.

Improved economic activity and employment can also strengthen demand for housing and commercial property in areas that become associated with new energy-sector investments.

Outlook

The Bonga Southwest/Aparo project has moved closer to a Final Investment Decision following the signing of the OML 118 PSC and DSA addenda.

With potential investment of up to $21 billion, peak oil production of about 175,000 barrels per day and projected gas production of 140mmscfd, the development could become an important addition to Nigeria’s deepwater production capacity.

The next major milestones will include progressing through FEED, securing the required approvals and moving towards the final investment decision and subsequent development phases.

For Nigeria, successful delivery of the project could provide additional oil and gas output, attract significant capital, create business opportunities and strengthen government revenue, while testing the effectiveness of the fiscal reforms introduced to revive investment in the deepwater sector.

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