Shell Nigeria Exploration and Production Company Limited (SNEPCo) has made a final investment decision (FID) on the Bonga North deep-water project, located off Nigeria’s coast.
This was contained in a statement issued by the international oil giant in London, the $5 billion investment is expected to yield approximately 350 million barrels of crude oil.
The project will involve a subsea tie-back to the Bonga Floating Production Storage and Offloading (FPSO) facility, in which Shell has a 55% stake.
The Bonga North project includes the drilling and completion of 16 wells, modifications to the existing FPSO, and the installation of new subsea infrastructure. This development is expected to maintain oil and gas production at the Bonga facility.
With estimated recoverable resources exceeding 300 million barrels of oil equivalent (boe), Bonga North is expected to reach peak production of 110,000 barrels of oil per day. First oil production is anticipated by the end of the decade.
According to Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, “This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio.”
This project will contribute to Shell’s continued cash generation in the Integrated Gas and Upstream business.
President Tinubu celebrates Shell, partners
President Bola Tinubu has welcomed the FID by Shell and its partners for the Bonga North Deep Offshore Field.
According to a statement by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, “the landmark development” marks Nigeria’s first deepwater oil venture in over a decade.
He attributed the development to the impact of the President’s policies and reforms in drawing investments to the oil and gas sector.
“The Renewed Hope Agenda fundamentally focuses on attracting investments to transform the Nigerian economy and deliver prosperity to our people. We designed our policies and reforms from the start of my administration to achieve this goal. Shell and its partners’ decision to invest in Bonga North affirms the success of our efforts. We will continue to offer the necessary support to ensure their success and the realisation of Nigeria’s energy potential,” President Tinubu was quoted in the statement.
What you should know
The Bonga North deep-water project is expected to produce approximately 350 million barrels of crude oil.
- Shell holds a majority operational interest of 55%, alongside its partners, including the Nigerian National Petroleum Corporation (NNPC), ExxonMobil, TotalEnergies, and Eni.
- The project is located in OML 118, at water depths exceeding 1,000 meters. Production began at the Bonga FPSO in 2005, with a capacity to produce 225,000 barrels of oil per day.
- According to Shell, the project produced its one-billionth barrel of crude oil in 2023.
The investment in Bonga North is expected to generate an internal rate of return (IRR) above the hurdle rate for Shell’s Upstream business.