Nigeria’s efforts to attract fresh investment into its deepwater oil and gas sector have received a major boost following the signing of key agreements between the Nigerian National Petroleum Company Limited (NNPC Ltd) and partners on the proposed Bonga Southwest/Aparo project.
The development, estimated to require between $15 billion and $21 billion in investment, has moved closer to a Final Investment Decision (FID) following the execution of new contractual agreements for the OML 118 asset.
The agreements were signed by NNPC Ltd and the OML 118 contractor parties, comprising Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited.
The parties executed an Addendum to the OML 118 Production Sharing Contract and an Addendum to the Dispute Settlement Agreement, giving effect to new fiscal and commercial terms approved by the Federal Government.
The Bonga Southwest/Aparo development is expected to become one of Nigeria’s largest new deepwater oil projects, with projected peak production of approximately 175,000 barrels of crude oil per day and 140 million standard cubic feet of gas per day.
The project is located within Oil Mining Lease 118, an offshore asset with significant oil and gas potential.
NNPC Chief Corporate Communications Officer, Andy Odeh, said the agreements represented a major milestone in advancing the project towards FID.
According to the national oil company, the agreements demonstrate the impact of recent government reforms aimed at creating a more competitive and attractive fiscal environment for deepwater investments.
The development follows President Bola Ahmed Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which was introduced to improve the competitiveness of Nigeria’s deepwater fiscal regime and encourage fresh capital inflows into the sector.
NNPC Group Chief Executive Officer, Bayo Ojulari, said the latest milestone showed that government reforms were beginning to translate into tangible investment opportunities.
He said the execution of the contractual addenda demonstrated the effectiveness of the Tinubu administration’s reforms in creating a clearer pathway for major energy investments.
Ojulari said NNPC Ltd would continue working with the Federal Government, project partners and other stakeholders to ensure that the Bonga Southwest/Aparo development delivers maximum value to Nigeria.
The project partners have also completed the Pre-Front End Engineering Design (Pre-FEED) phase, bringing the development closer to the more detailed Front End Engineering Design (FEED) stage.
The Pre-FEED process helped to further define the technical and commercial scope of the project and prepare it for subsequent engineering activities, subject to the required regulatory and governance approvals.
Another significant development is the emergence of a preferred bidder for the Floating Production Storage and Offloading (FPSO) vessel planned for the project.
The FPSO is expected to serve as the principal offshore facility for processing, storing and exporting crude oil produced from the Bonga Southwest/Aparo field.
However, NNPC and its partners stressed that the selection of a preferred bidder does not constitute a final contract award.
The proposed FPSO contract remains subject to applicable partner, regulatory, assurance and governance processes. Any eventual Engineering, Procurement, Construction and Installation contract will also require the necessary approvals.
The advancement of the Bonga Southwest/Aparo project comes at a critical time for Nigeria’s petroleum industry, which has faced years of declining investment and challenges in attracting new capital into major oil developments.
Deepwater projects require substantial upfront investment and long development periods, making fiscal stability and commercial certainty crucial factors in investors’ decisions.
The project, if successfully developed and brought into production, could significantly increase Nigeria’s crude oil output while providing additional gas production.
It is also expected to generate government revenue and foreign exchange and create opportunities for Nigerian businesses across the oil and gas value chain.
The development could benefit indigenous companies involved in engineering, fabrication, marine transportation, logistics, offshore construction and other petroleum-related services.
The project partners are also expected to support local content development through increased participation by Nigerian contractors and suppliers, technology transfer and skills development.
The Federal Government has been implementing fiscal and regulatory reforms aimed at reversing the decline in investment in Nigeria’s oil and gas industry.
The reforms are particularly important for deepwater projects, where investors typically compare the fiscal terms, regulatory environment and long-term commercial prospects of competing oil-producing countries before committing billions of dollars.
The Bonga Southwest/Aparo milestone could therefore serve as an important test of Nigeria’s renewed efforts to attract large-scale investment into its offshore petroleum sector.
Once completed, the project is expected to become a significant production hub and contribute to the government’s objective of increasing oil and gas output sustainably.
NNPC Ltd said it would continue working with the government, regulators, contractors and other stakeholders to advance the project safely and efficiently while maximising its economic benefits for Nigeria.
