Nigeria has taken a major step towards reviving investment in its deepwater oil industry after the Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners signed new agreements for the development of the Bonga Southwest/Aparo project.
The project, located in Oil Mining Lease (OML) 118, is expected to attract between $15 billion and $21 billion in investment, making it one of the largest potential oil developments in Nigeria in recent years.
When fully developed, Bonga Southwest/Aparo is projected to produce about 175,000 barrels of crude oil per day at peak, alongside around 140 million standard cubic feet of gas daily.
The latest milestone came after 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 two important agreements.
The agreements amend the Production Sharing Contract and the Dispute Settlement Agreement for OML 118. They are designed to introduce new fiscal and commercial terms approved by the Federal Government and move the project closer to a Final Investment Decision (FID).
The development is significant because Nigeria has struggled to attract major new capital into its deepwater oil sector. Offshore projects require billions of dollars in upfront investment and take years to develop, making stable and competitive fiscal policies important to investors.
The agreements followed President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which aims to make Nigeria’s deepwater petroleum sector more attractive to investors.
NNPC Ltd Group Chief Executive Officer, Bayo Ojulari, said the development showed that government reforms were beginning to translate into actual investment opportunities.
The project has also moved forward technically. Its Pre-Front End Engineering Design (Pre-FEED) phase has been completed, allowing the partners to advance towards the more detailed FEED stage.
Another major development is the emergence of a preferred bidder for the project’s planned Floating Production Storage and Offloading (FPSO) vessel.
The FPSO will serve as a major offshore facility for processing, storing and exporting crude oil. However, NNPC stressed that the selection of a preferred bidder does not yet represent a final contract award, as additional regulatory, commercial and partner approvals are still required.
If completed, Bonga Southwest/Aparo could have a major impact on Nigeria’s oil production and government revenues. The project could also create opportunities for Nigerian businesses involved in engineering, fabrication, logistics, marine services and offshore construction.
The development is expected to strengthen local content participation, support technology transfer and create opportunities for skills development among Nigerian workers and companies.
For Nigeria, the project comes at a crucial time as the government seeks to increase crude oil production, attract foreign capital and reverse years of underinvestment in the petroleum industry.
The progress on Bonga Southwest/Aparo therefore represents more than another oil project. It is a test of whether Nigeria’s new fiscal and regulatory reforms can convince investors to commit billions of dollars to the country’s energy sector.
