Nigeria is making a stronger play to unlock one of its most important untapped oil projects, and Shell appears to be at the center of that push.
The government has approved more attractive fiscal terms for the Bonga Southwest Aparo deepwater development, in a bid to move the long-delayed project toward a final investment decision.
At the heart of the new arrangement is a tax rebate of $11.50 per barrel of crude produced from the project, a rate designed to make the venture more commercially appealing for Shell and its partners.
The incentive is aimed at accelerating investment in a project that could bring about $20 billion in foreign direct investment and significantly expand Nigeria’s deepwater output.
A long-delayed project gets fresh momentum
Bonga Southwest Aparo has been on the table for years, but like many large-scale oil projects in Nigeria, it has faced delays tied to commercial uncertainty and regulatory bottlenecks. The new fiscal terms are meant to change that equation by improving returns and giving investors more confidence to proceed.
Once operational, the project is expected to produce about 150,000 barrels of oil per day and 140 million standard cubic feet of gas daily. For Nigeria, that would represent a meaningful boost at a time when the country is trying to stabilize its energy sector and restore investor confidence.
A wider deepwater strategy.
The tax rebate is not being framed as a one-off concession.
Reports indicate that Nigeria intends to extend similar incentives to other international oil companies pursuing new deepwater projects, with the policy expected to remain in place until at least 2029.
That approach suggests a broader strategy: use fiscal certainty to pull in long-term capital and revive a segment of the oil industry that has struggled to attract major new commitments. Shell’s request that the tax-credit order be published in the official gazette also shows how seriously the company is treating the need for legal and policy certainty.
Tinubu’s investment drive
The development fits into President Bola Tinubu’s wider economic reform agenda, which has leaned heavily on executive action and investment incentives to reverse years of declining oil sector performance. Nigeria’s crude output has been hurt by insecurity, pipeline vandalism, and persistent losses from theft, all of which have weakened production over time.
There are signs the reforms may be starting to work. Nigeria’s oil output rose to an average of 1.56 million barrels per day in June 2026, the highest level recorded since April 2020.
If Bonga Southwest Aparo reaches a positive FID (Final Investment Decision), it would mark the country’s first major deepwater production sharing contract decision since 2008 and could signal renewed momentum for Nigeria’s oil ambitions. Source Nigeria stories
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