President Bola Tinubu’s administration has celebrated a significant milestone in Nigeria’s energy sector: a $5 billion investment by Shell and its partners in the Bonga North Deep Offshore Field. This substantial investment, marking Nigeria’s first deep-water oil project in over a decade, is projected to yield approximately 350 million barrels of crude oil. The project, located 130 kilometers offshore in Oil Mining Lease 118, underscores the administration’s commitment to attracting foreign investment and revitalizing the nation’s energy landscape. The investment decision, known as the Final Investment Decision (FID), signifies renewed confidence in Nigeria’s potential as a major player in the global energy market. President Tinubu has hailed this as a testament to his administration’s “Renewed Hope Agenda,” which prioritizes attracting investments to drive economic transformation and prosperity for the Nigerian people.
The Bonga North project represents a tangible outcome of the Tinubu administration’s proactive policies and reforms aimed at creating a more favorable investment climate. Specifically, presidential directives issued in early 2024 streamlined regulatory approvals, reduced operational costs, and introduced competitive fiscal incentives, thereby creating a more conducive environment for international energy companies. Shell, holding the largest operational interest at 55%, is partnering with the Nigerian National Petroleum Corporation Limited (NNPC), ExxonMobil, TotalEnergies, and Eni in this venture. This collaboration demonstrates a synergistic approach to harnessing Nigeria’s vast offshore oil reserves. The president has emphasized his administration’s ongoing commitment to providing the necessary support to ensure the project’s success and the realization of Nigeria’s full energy potential.
President Tinubu’s strategic engagement with global energy leaders has been pivotal in attracting this renewed wave of investment. His declaration in July 2023, during a high-level meeting with Shell’s global leadership, that “We are open for business and serious about creating a stable, predictable, and investor-friendly environment” has resonated with international stakeholders. The Bonga North project is not an isolated incident but rather the second of several “blueprint projects” selected by the administration to operationalize Presidential Directives 40, 41, and 42. These directives, issued in the first quarter of 2024, are designed to enhance regulatory clarity, expedite project timelines, and incentivize investment in the Nigerian energy sector. The Ubeta oilfield (OML 58) serves as another example of the successful implementation of these directives.
The positive impact of these policy initiatives is further exemplified by the Special Adviser to the President on Energy, Olu Verheijen’s comments. Verheijen highlighted that the Bonga North FID counters the narrative of International Oil Companies (IOCs) exiting Nigeria. Instead, it signifies a strategic shift by IOCs toward deep-water and integrated gas projects, aligning with President Tinubu’s vision of transforming Nigeria into a global energy hub. This transition opens up opportunities for local oil and gas companies to expand their operations in onshore fields, fostering a more robust and diversified Nigerian energy sector. This shift also underscores the administration’s commitment to positioning Nigeria as a leader in energy innovation and investment.
The Tinubu administration’s focus on deep-water projects like Bonga North marks a significant departure from the traditional emphasis on onshore oil production. This strategic shift reflects a recognition of the vast untapped potential in Nigeria’s offshore reserves and the need to leverage advanced technologies for efficient and sustainable extraction. By incentivizing investments in deep-water exploration and production, the administration aims to unlock substantial economic benefits for the country, including increased revenue generation, job creation, and technological advancement. This approach also aligns with global trends in the energy sector, where deep-water exploration is increasingly viewed as a key driver of future oil and gas production.
The Bonga North project and the broader policy framework implemented by the Tinubu administration represent a significant step towards achieving energy security and economic prosperity for Nigeria. The administration’s commitment to creating a stable and predictable investment climate has instilled confidence in international energy companies, leading to substantial investments in critical deep-water projects. Furthermore, the emphasis on fostering local participation in the energy sector through the divestment of onshore assets to local companies ensures a more inclusive and sustainable development trajectory. The administration’s vision is to establish Nigeria as a global energy hub, leveraging its vast resources to drive economic growth and improve the lives of its citizens. The Bonga North project is a clear manifestation of this vision and a testament to the effectiveness of the administration’s strategic approach.
