One of the largest oil and gas companies in the United States (US), ExxonMobil’s is planning $10 billion investment in Nigeria’s offshore oil operations with intention to significantly improve deep-water operations and production.Exxon said its investment was further proof of its unwavering commitment to Nigeria’s industry.
This commitment also reflects renewed confidence in Nigeria’s oil and gas sector, which is experiencing increased momentum with the revival of key projects such as the Brass and Olokola Liquefied Natural Gas (LNG) initiatives, spearheaded by the Nigerian National Petroleum Company(NNPCL).
Already, ExxonMobil representatives have held extensive meetings with the government on this significant investment.
The representative of ExxonMobil in Nigeria, Shane Harris said, “We are working closely with the president’s office to secure favourable fiscal arrangement that will make this significant investment possible.
“Our commitment to Nigeria remains unwavering,” Mr Harris said.
Besides ExxonMobil, Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell Plc has taken a $5 billion Final Investment Decision (FID) on the Bonga North project, raising optimism surrounding the multinational’s planned asset sale in Nigeria.
Shell said production will peak at about 110,000 barrels of oil per day, with 300 million barrels of oil equivalent recoverable from the area.
The first oil is expected by the ‘end of the decade,’ according to Shell.
The multi-billion-dollar deep-water investment, the first 110,000 bpd project FID to be taken in Nigeria since the Egina field’s FID was announced in 2013, is seen as a positive step towards unlocking the value of Shell’s Nigerian assets and facilitating a smooth transition to new ownership.
The Bonga North project will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility which Shell operates with a 55 per cent interest.
The project will sustain oil and gas production at the Bonga facility, Shell said.
Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day (bpd), with first oil anticipated by the end of the decade, the supermajor added.
“This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
The announcement of the FID came a day after Nigeria’s maritime agency said this weekend that an oil spill had occurred at Shell’s Bonny loading terminal in Nigeria’s Delta region after a pipeline ruptured. Shell’s local unit has shut down the affected pipeline.
Shell is also seeking to sell its onshore assets in the largest African OPEC producer.
Early this year, Shell said it had reached an agreement to sell its Nigerian onshore subsidiary to Renaissance, a consortium of five companies for $1.3 billion.
At the time, Shell’s Yujnovich said that “This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions.”
But the deal has yet to be approved.
In October, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) blocked the sale although it approved a separate transaction in which ExxonMobil sold its onshore operations to Nigerian firm Seplat Energy.
President Bola Tinubu has welcomed Shell and its four partners’ namely the Nigerian National Petroleum Corporation (NNPC), ExxonMobil, TotalEnergies, and Eni’s announcement on Monday of the Final Investment Decision (FID) on the Bonga North Deep Offshore Field.
The landmark development, Nigeria’s first deepwater oil project in over a decade, underscored the transformative impact of the President’s policies and reforms in attracting investments in the oil and gas sector.
Adviser to the president on Information and Strategy, Bayo Onanuga, said the FID signals renewed confidence in Nigeria’s energy sector and demonstrates the effectiveness of the Tinubu administration’s strategic focus on engendering a robust and competitive investment climate.
The president in his remarks said, “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’s strategic engagement with global energy stakeholders has been instrumental in this renewed wave of investments.
In July 2023, at the first of several high-level meetings with Shell’s global leadership, President Tinubu had declared, “We are open for business and serious about creating a stable, predictable, and investor-friendly environment.”
Presidential Directives issued in early 2024 reinforced this commitment by fast-tracking regulatory approvals, reducing operational costs, and introducing competitive fiscal incentives.
The Bonga North project is the second of the blueprint projects President Tinubu selected to drive the implementation of the transformative Presidential Directives 40, 41, and 42 issued in the first quarter of 2024.
These directives, aimed at enhancing regulatory clarity, accelerating project timelines, and incentivising investment in Nigeria’s energy sector, have yielded remarkable results.
Earlier this year, the Ubeta oilfield (OML 58), the first blueprint project under this initiative, achieved a Final Investment Decision (FID) through a partnership between TotalEnergies and NNPC Limited. Dormant since its discovery in 1965, the Ubeta project will produce 350 million standard cubic feet of gas per day, bolstering domestic supply and expanding Nigeria’s presence in the global energy market.
With both blueprint projects now achieving FID, the success of these initiatives underscores the effectiveness of the President’s strategic vision for Nigeria’s energy future.
Special Adviser to the President on Energy, Ms Olu Arowolo Verheijen, while commenting on the Bonga North milestone said, “The Bonga North FID dispels the misconceptions about International Oil Companies leaving Nigeria. Instead, we are witnessing a strategic pivot of IOCs-powered capital and technical capacity to deepwater and integrated gas projects, which align with President Tinubu’s vision of transforming Nigeria into a global energy hub. The divestments from onshore operations create opportunities for local oil and gas companies to expand and thrive, building a strong foundation for Nigeria’s energy future.”
Verheijen further noted, “The success of Bonga North and Ubeta demonstrates the efficacy of the reforms and directives championed by the president. These projects will trigger broader investments to revolutionise Nigeria’s power generation, transportation, and manufacturing sectors. As we look ahead to 2025, we anticipate further FIDs from international and domestic players, marking a new era of growth and opportunity for Nigeria.”
Tinubu administration remains steadfast in positioning Nigeria as a global leader in energy innovation and investment, ensuring that these efforts translate into tangible benefits for all Nigerians.
Our correspondent reports that the Nigerian National Petroleum Company Limited (NNPCL) has set an ambitious target to raise the country’s crude oil output to two million barrels per day by the end of this year.
This goal comes after the nation’s daily oil output saw a significant increase, climbing from 1.27 million barrels in June to 1.6 million barrels in July, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The NNPCL boss Mele Kyari, expressed confidence in reaching this target, emphasising the company’s commitment to achieving the goal and acknowledged the crucial role of security agencies in combating oil theft and pipeline vandalism.
“The target is to increase production to two million barrels by the end of the year, and we are fully committed to doing that,” Kyari stated.
This attraction could be linked to Nigerian government incentives after it expressed the anticipation to attract as much as $10 billion of new investments in deep-water gas exploration through tax breaks and other measures proposed in a new policy framework for the industry.
The Federal Executive Council has approved the framework which seeks to speed up developments in Nigeria’s offshore gas sector, where an estimated 67 per cent of the resource remains undeveloped, by providing tax credits for new investments.
Government also plans a gas-production allowance for greenfield developments in onshore and shallow-water locations that start producing by January 1, 2029.
Under the consideration government intends to unlock between $5 billion to $10 billion of new investments in Nigeria in the near- to medium term.
The policy is expected to fast-track the development of natural gas, displace fossil fuels for transportation and bolster the country’s energy security.
Global companies will spend an estimated $90 billion on deep-water oil and gas projects in the coming years and this is the pool of funds that government reforms are targeting.
Since assuming office in May 2023, Tinubu has implemented a series of reforms that he said have attracted more than $30 billion in foreign direct investment
