Nigeria’s deepwater oil sector received a major boost on Monday as the Nigerian National Petroleum Company Limited and its partners signed agreements expected to move the proposed Bonga Southwest/Aparo project closer to a Final Investment Decision.
The project, located in Oil Mining Lease 118, is estimated to attract between $15 billion and $21 billion in lifetime investment and could become one of Nigeria’s largest new deepwater developments.
At peak production, the Bonga Southwest/Aparo project is expected to produce about 175,000 barrels of crude oil per day and 140 million standard cubic feet of gas daily.
NNPC Ltd and the OML 118 Contractor Parties — Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria Deepwater Limited and Nigerian Agip Exploration Limited — signed an Addendum to the OML 118 Production Sharing Contract and an Addendum to the Dispute Settlement Agreement.
The agreements give effect to new fiscal and commercial terms approved by the Federal Government to support the project’s development.
NNPC said the development reflected the impact of recent government reforms aimed at improving Nigeria’s competitiveness and attracting major investments into its deepwater petroleum sector.
“The Nigerian National Petroleum Company Limited, and the OML 118 Contractor Parties, Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited, today executed the Addendum to the OML 118 Production Sharing Contract and the Addendum to the Dispute Settlement Agreement, marking a major milestone in the advancement of the deepwater Bonga Southwest/Aparo project towards Final Investment Decision.
“The execution gives effect to the fiscal and commercial terms approved by the Federal Government to support the development of BSWAp, and it reinforces Nigeria’s commitment to creating a competitive, stable and attractive environment for large-scale deepwater investment.”
The milestone follows President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives Tax Remission Order 2026, which was designed to improve the competitiveness of Nigeria’s deepwater fiscal framework and unlock fresh investments.
NNPC Group Chief Executive Officer Bayo Ojulari said the agreements demonstrated how recent reforms were beginning to translate into investment opportunities.
“The execution of the BSWAp PSC and DSA Addenda demonstrates the effectiveness of President Tinubu’s reforms in translating policy into investment. This is about unlocking a major deepwater project and demonstrating that Nigeria has a competitive fiscal framework and a clear pathway for sustainable investment in its energy sector.
“NNPC Ltd will continue to work closely with the Federal Government, our partners and other stakeholders to ensure that this project delivers maximum value for the Federation and the Nigerian people,” Ojulari said.
The project partners also announced the completion of the project’s Pre-Front End Engineering Design phase, another major step towards the more detailed Front End Engineering Design stage.
According to NNPC, the Pre-FEED work helped mature the project’s technical and commercial scope and positioned it for further engineering activities, subject to required approvals and governance processes.
The partners also disclosed that a preferred bidder had emerged for the Floating Production Storage and Offloading vessel planned for the project.
The FPSO will serve as the central offshore facility for processing, storing and exporting crude oil from the field.
However, NNPC stressed that the emergence of a preferred bidder does not amount to a final contract award. Any Engineering, Procurement, Construction and Installation contract will still be subject to partner, regulatory, assurance and governance approvals.
The development allows the FPSO concept to progress towards the FEED stage as further engineering and commercial work continues ahead of a Final Investment Decision.
Beyond its expected oil and gas production, the project could generate additional government revenue and foreign exchange while creating opportunities for Nigerian companies in engineering, fabrication, offshore construction and logistics.
NNPC said the project is also expected to deepen local content participation, strengthen local fabrication, marine and engineering capabilities, support technology transfer and create opportunities for skills development.
The Bonga Southwest/Aparo project comes as Nigeria seeks to reverse years of underinvestment in its oil and gas sector and attract fresh capital into deepwater exploration and production.
Once operational, the project is expected to become a major new production hub and support Nigeria’s ambition to sustainably increase its oil and gas output.
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