NNPC Signs Supplemental Agreement for Bonga Southwest

en.Wedoany.com Reported - The Nigerian National Petroleum Company (NNPC) and the OML 118 contractors—Shell Nigeria Exploration and Production Company, Esso Nigeria Exploration and Production (Deepwater) Company, and Nigerian Agip Exploration Company—have signed supplemental agreements to the OML 118 Production Sharing Contract (PSC) and the Dispute Settlement Agreement (DSA), implementing the fiscal and commercial terms previously approved by the Federal Government of Nigeria for the Bonga Southwest/Aparo deepwater project. The project continues to progress toward a Final Investment Decision (FID), with NNPC estimating a full-lifecycle investment of $15–21 billion and peak production of approximately 175,000 barrels of crude oil per day and 140 million standard cubic feet of natural gas per day.

The project partners have also confirmed the completion of the pre-front-end engineering design (Pre-FEED) phase. The next stage is front-end engineering design (FEED), which remains subject to partner, project assurance, and governance procedures. Following a competitive selection process, a preferred contractor for the floating production, storage, and offloading (FPSO) vessel has been identified, though the company name has not yet been disclosed; this preferred status remains subject to partner, regulatory, project assurance, and governance procedures, and the subsequent formal award of the FPSO engineering, procurement, construction, and installation (EPCI) contract will also require the completion of relevant approvals.

Project tender documents released in February 2026 indicate that Bonga Southwest/Aparo is operated by Shell Nigeria Exploration and Production Company, with the development area spanning OML 118, 132, and 140 blocks, located approximately 135 kilometers offshore Nigeria at a maximum water depth of about 1,400 meters. The current development concept features a new deepwater production hub and a spread-moored FPSO, with the Phase 1 subsea system planned to include 12 production wells and 11 water injection wells.

Phase 1 subsea scope also includes approximately 26 kilometers of production flowlines, 14 kilometers of water injection flowlines, 100 kilometers of gas export pipeline, and approximately 35 kilometers of subsea umbilicals, with final flowline and umbilical lengths subject to the ultimate subsea layout. The EPC2 package covers pipelines, flowlines, risers, and the installation of subsea equipment and umbilicals; the EPC3 package involves subsea Christmas trees, water injection trees, manifolds, and control systems; the EPC4 package covers the procurement of static and dynamic umbilicals; and the EPC5 package includes the turret mooring and crude offloading system. Pre-qualification for these four packages commenced in February.

The project's fiscal terms have been advancing steadily. On March 10, the Nigerian President approved a fiscal incentive package for Bonga Southwest/Aparo, including enhanced production tax credits and measures addressing matters related to the 2021 Dispute Settlement Agreement; on August 6, Nigeria signed the Deepwater Oil and Gas Project Incentives (Tax Relief) Order 2026. NNPC subsequently confirmed that the new framework covers deepwater development projects, including Bonga Southwest, while the PSC and DSA supplemental agreements signed on August 24 further implement the corresponding fiscal and commercial arrangements for the project.