Page 13 - AfrOil Week 21 2021

AfrOil PROJECTS & COMPANIES AfrOil

New deal unlocks

Bonga expansion

WEST AFRICA THE state-owned Nigerian National Petroleum the $16bn Bonga South West Aparo (BSWA)
Corp. (NNPC) announced several deals this development.
week for the country’s oil mining lease (OML) Shell previously spoke of plans to develop
118, bringing to an end a long-standing dispute BSWA over three phases targeting cumulative
over the development of the offshore Bonga production of 3.2bn barrels.
oilfield. Announcing the breakthrough deal, NNPC’s
Five agreements were signed that iron out tax group managing director Mele Kyari said: “This
issues from the previous deal, with NNPC say- marks a watershed in the administration of
ing that a “new PSC with clearly aligned terms” deepwater operations in Nigeria. Over $10bn of
had been agreed with Royal Dutch Shell, Total, investment will be unlocked [in Bonga’s expan-
ExxonMobil and Eni that will run for a further sion phase] as a result of this development.”
20 years. He added: “This is an indication of a renewed
Bonga, Nigeria’s first deepwater oilfield, has confidence between NNPC and its partners;
a production capacity of 225,000 barrels per day between the [Nigerian] government and the
(bpd) of crude and 150mn cubic feet (4.25mn investing communities.”
cubic metres) per day of gas. It is located 120 km Meanwhile, it is also expected to bring more
south-west of the Niger Delta and lies at a water than $780mn in immediate revenues for Abuja
depth of 1,000 metres. while freeing the partners from in excess of $9bn
A spokesperson from Shell said: “Through in contingent liabilities.
these agreements, stakeholders will have clear The announcement follows comments from
and stable set of terms incentivising further Mele Kyari in November that suggested NNPC
development of the OML 118 block and open- was close to resolving disputes relating to the
ing further opportunities in the prolific Nigerian PSCs for OMLs 118 and 125 that have delayed
deepwater oil and gas industry.” efforts by the country to expand its oil produc-
Indeed, the new deal will allow the partners tion capacity.
in the Shell Nigeria Exploration and Production Shell invited bids from shipbuilders for a
Co. (SNEPCO) – comprised of Shell (55%), 150,000 bpd floating production storage and
Esso Exploration and Production Nigeria offloading (FPSO) facility for Bonga Southwest
(20%), Total E&P Nigeria (12.5%) and Nigerian in 2019, but halted the process when Nigeria
Agip Oil Co. (NAOC, 12.5%) – to proceed with started reconsidering the PSC.™

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