After years of delay, Shell has received approval to begin the Bonga Southwest project, following discussions held in London between its CEO Bern Van Beurden and Nigeria’s President Muhammadu Buhari.
The project, which was first scheduled for completion in 2014, is expected to add 225,000 barrels per day to Nigeria’s present production average of 1.8-2.00 million bpd.
After the discussions between Buhari and van Beurden, Minister of State for Petroleum Resources, Ibe Kachikwu, sent a letter to the Group Managing Director (GMD) of Nigeria’s state-owned oil company NNPC, Mikanti Baru, instructing the corporation and the Anglo-Duch oil company to conclude arangements for the start of the project.
“Please recall the meeting held between His Excellency, Mr. President and Royal Dutch Shell on April 17, 2018 in London, on important matters, including the Bonga South West project. In furtherance to the meeting, NNPC is required to urgently conclude all processes leading to the execution of the Bonga South West project by June 18, 2018,” Kachikwu is quoted as saying in the letter, dated May 9th and obtained by ThisDay.
NNPC granted all necessary approvals and replied the Minister’s correspondence on the 6th of June, in a letter signed by the Group General Manager (GGM), National Petroleum Investment Management Service (NAPIMS), the investment section of NNPC. This project is one of several deep offshore projects delayed by uncertainty over the clarity of terms and an absence of funding.
The Bonga Southwest Project is valued at $10billion, and will be operated by Shell Nigeria Exploration and Production Company (SNEPCO).
Buhari and Van Beurden also touched on expanding Nigeria’s liquefied gas capacity. The total value of their agreement is valued at $15billion. The delay in passing the Petroleum Industry Bill (PIB) has held an estimated $23billion in value.
Bonga is the earliest offshore project licensed in Nigeria. Shell began exploring the oil field in 1993.