Production-linked incentive, more than double the standard rate, positions Bonga Southwest Aparo for a long-awaited Final Investment Decision.
President Bola Tinubu has approved a production-linked tax credit of $11.50 per barrel for Shell Plc’s Bonga Southwest Aparo deepwater oil project, an incentive more than double the standard rate available under Nigeria’s existing fiscal framework. The enhanced rebate, expected to unlock a Final Investment Decision (FID) on the long-delayed $20 billion project, will also be extended to other international oil companies pursuing new deepwater developments in Nigeria and will remain in force until at least 2029.
The approval followed months of technical and commercial negotiations involving NNPC Limited, the Nigeria Revenue Service, the President’s Special Adviser on Energy Olu Verheijen, and Shell CEO Wael Sawan. Tinubu is said to have directed agencies to fast-track all commercial enablers required to move the project forward, with the government targeting FID before the end of the president’s first term. A Shell spokesperson said the company continues to progress Bonga Southwest Aparo toward development and will communicate material updates through official channels.
Bonga Southwest Aparo is located approximately 120 kilometres offshore in the Gulf of Guinea and is projected to produce 150,000 barrels of crude oil per day, alongside around 140 million standard cubic feet of gas per day. It holds an estimated 800 million barrels of recoverable oil equivalent across its development phases and would rank among the largest single energy investments on the African continent. Shell, which increased its ownership stake in the Bonga licence to 65% following its acquisition of TotalEnergies’ interest in 2025, operates the project with NNPC Limited as concessionaire.
The announcement arrives as Nigeria’s upstream sector shows signs of a broader recovery. Data from the Nigerian Upstream Petroleum Regulatory Commission show that the country’s crude output averaged 1.56 million barrels per day in June, its highest monthly figure since April 2020. Analysts at Chapel Hill Denham have described large-scale deepwater investments as critical to Nigeria’s long-term production outlook, noting that offshore fields typically offer higher productivity and lower exposure to the security risks that have plagued onshore operations in the Niger Delta.
Despite the renewed momentum, questions persist over the long-term legal durability of the incentive. Because the tax credit was introduced through an executive order rather than primary legislation, it remains vulnerable to reversal by future administrations. Shell has formally requested that the Federal Government publish the order in the Official Gazette to strengthen its legal standing, and government officials have reportedly commenced the gazetting process.
The Bonga Southwest Aparo incentive builds on a broader push by the Tinubu administration to reverse years of underinvestment in Nigeria’s petroleum sector through a series of executive orders, fiscal reforms, and regulatory measures introduced since May 2023. Shell paid $5.34 billion in taxes and other charges to Nigeria in 2024, more than to any other jurisdiction, underscoring the strategic importance of retaining the company’s deepwater commitment even as it exits its onshore operations in the country.
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