Shell Plc and its partners in Nigeria are considering how to develop a large offshore oil field, a move that could eventually lead to about $20 billion in investment, according to the company’s chief executive.
Shell CEO Wael Sawan said the company is working with partners on the Bonga South West project, which could attract roughly $20 billion in foreign direct investment if it reaches a final investment decision. Speaking in a video shared by Nigeria’s presidency, he described the project as one of the world’s largest potential energy developments and noted that Shell is also looking at other opportunities in the country.
Sawan said Shell is eager to invest in Nigeria and noted that this has not always been the case. He credited recent leadership reforms with improving the investment climate and restoring the company’s confidence.
Bonga South West is located in deepwater offshore the Niger Delta and is estimated to hold about 820 million barrels of oil. The field could reach peak production of up to 220,000 barrels per day. Sawan said about half of the $20 billion would go toward capital spending, while the rest would cover operating costs and other expenditures within Nigeria.
Shell holds the largest stake in the project, alongside partners ExxonMobil, TotalEnergies, Eni and Nigeria’s state-owned NNPC.
Major oil companies remain cautious about committing to large projects as they focus on capital discipline amid relatively weak oil prices. At the same time, uncertainty around future oil supply is increasing the need for new sources of production.
A Shell spokesperson said Wael Sawan discussed several potential projects with President Bola Tinubu, including Bonga South West, which could lead to future investment decisions. The company said it will continue to invest in upstream projects where conditions allow.
Shell paid $5.34 billion in taxes and other charges to Nigeria in 2024, more than to any other country. The payments rose from the previous year as the company moves closer to exiting its onshore oil production business.
Shell’s planned exit from onshore production in the Niger Delta, one of its most emissions-intensive operations, is part of its strategy to streamline its portfolio and work toward net-zero emissions by 2050. The company has long faced allegations of environmental damage in the region.
Sawan said incentives approved by Nigeria’s president have improved visibility for the project. He said Shell plans to begin pre-FID work in the coming months, with the aim of eventually reaching a final investment decision.
source:worldoil.com
African Energy Council