Nigeria has approved a special production-linked tax incentive for Shell Plc’s Bonga Southwest Aparo deepwater oil project.
According to local media reports, President Bola Tinubu approved the revised fiscal terms that grant Shell and its partners a tax credit of $11.50 for every barrel of crude oil produced from the Bonga Southwest Aparo field—more than double the standard production-linked incentive currently available under Nigeria’s fiscal regime.
Quoting the report by Bloomberg, the reports explained that the move was aimed at unlocking an estimated $20 billion in investment, accelerating delayed offshore developments, and strengthening the country’s crude oil production capacity.
The incentive is designed to help move the long-delayed project toward a Final Investment Decision (FID) after years of regulatory and commercial uncertainty.
The reports said the enhanced tax credit would not be limited to Shell’s project and that the Federal Government plans to extend the same incentive to other international oil companies developing new deepwater projects in Nigeria, with the programme expected to remain in place until at least 2029.
The policy is part of a broader strategy by the Tinubu administration to restore investor confidence, attract fresh upstream capital, and reverse years of declining investment caused by insecurity, crude oil theft, pipeline vandalism, ageing infrastructure, and policy uncertainty.
The Bonga Southwest Aparo field is regarded as one of Nigeria’s largest undeveloped deepwater oil assets.
According to the Nigerian National Petroleum Company Limited (NNPC Ltd.), the project is expected to produce approximately 150,000 barrels of crude oil per day when operational, making it one of the country’s most significant offshore developments and a major contributor to future production growth.
Industry estimates place total investment in the project at around $20 billion, making it one of the largest potential foreign direct investments in Nigeria’s energy sector.
GIK/APA