Nigeria targets FID on Shell-operated Bonga North oil project before 2025

Nigeria and its foreign oil partners, including Shell, are set to take a final investment decision on the Bonga North offshore oil project before the end of 2024, the country’s oil minister said Oct. 20.

Partners in the Bonga North project include state-owned Nigerian National Petroleum Co., ExxonMobil, and European energy companies Shell, TotalEnergies and Eni. Shell holds the biggest working interest at 55%, according to S&P Global Commodity Insights data.

The project is expected to unlock about 350 million barrels of oil equivalent of Nigerian oil reserves and extend the life of the Shell-operated Bonga floating production, storage and offloading vessel for an additional 15 years.

In a statement Oct. 20, Nigeria’s Minister of State for Oil Heineken Lokpobiri said efforts by the government to provide a conducive environment for investors had set the stage for the partners’ “recent approval for investment in the Bonga North Offshore project before year end.”

Lokpobiri said he recently held talks with Nicolas Terraz, the president of TotalEnergies EP Nigeria, in Abuja.

President Bola Tinubu, who won office last year on an ambition to increase Nigerian oil production and therefore its vital oil revenues, has continued a recent tradition of retaining the official oil minister position for himself, with Lokpobiri and Ekperikpe Ekpo serving as ministers of state for oil and gas, respectively.

Shell had said previously that the Bonga North development would commence this year and would involve the drilling of over 40 subsea wells. Bonga is Nigeria's first deepwater oil field, with the capacity to produce 225,000 b/d of crude oil and 150 MMcf/d of gas.

The company could not immediately be reached for comment.

The Bonga expansion plan, along with the Bonga Southwest, is key to the UK energy company's 10-year operating strategy in the country, with a peak target of 370,000 b/d of oil from Shell’s Nigerian deepwater assets by 2032.

OPEC quota

Shell has agreed to sell its Nigerian onshore business to Renaissance, a consortium of five mostly-Nigerian companies, after years of spills and theft, but the transaction has faced regulatory hurdles and delays.

Nigeria has struggled to meet its OPEC+ output quota in recent years due to underinvestment, crude theft, field maturation and an exodus of international oil companies from its troubled onshore. It pumped roughly 1.5 million b/d in recent months, well below the capacity of some 2.2 million b/d. The country's quota was reduced to 1.5 million b/d in January from 1.74 million b/d.

The country aims to ramp up crude output to around 2 million b/d by the end of 2024, according to Nigerian officials.