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The Nigerian National Petroleum Company Limited (NNPCL) and its partners have signed an agreement on the proposed Bonga Southwest/Aparo project, which is expected to attract investment of up to $21 billion.
The project, located on Oil Mining Lease 118, is expected to be one of the largest new deepwater developments in Nigeria, with estimated peak production of approximately 175,000 barrels of oil per day and 140 million standard cubic feet of gas per day.
NNPC Ltd and Contractor Parties OML 118; Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited, signed the OML 118 Production Sharing Contract Addendum and Dispute Settlement Agreement Addendum.
The agreement imposes new fiscal and commercial terms agreed to by the Federal Government to support the development of the Bonga Southwest/Aparo project. The development is particularly significant for Nigeria, which in recent years has struggled to secure major new investment in its deepwater petroleum sector despite having some of Africa’s largest offshore oil and gas resources.
In contrast to operations in inland and shallow waters, deepwater projects require large initial capital and long-term fiscal certainty, so the tax competitiveness and commercial framework of a country are key considerations for international investors.
NNPC, in a statement issued by its Chief Corporate Communications Officer, Andy Odeh, said this latest agreement demonstrated the practical impact of recent Federal Government reforms aimed at restoring Nigeria’s attractiveness as a deepwater investment destination.
The statement read, “Nigerian National Petroleum Company Limited, and the OML 118 Contracting Parties, Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited, today signed the OML 118 Production Sharing Contract Addendum and Dispute Settlement Agreement Addendum, marking an important milestone in the progress of the Bonga Southwest/Aparo deepwater project towards Final Investment Decision.
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“This execution impacts the fiscal and commercial terms agreed by the Federal Government to support the development of BSWAp, and it reinforces Nigeria’s commitment to creating a competitive, stable and attractive environment for large-scale water investment.”
This achievement follows President Bola Tinubu’s approval of the Deepwater Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which is designed to improve the competitiveness of Nigeria’s deepwater fiscal regime and unlock new investments.
NNPC said the implementation of the addendum shows how policy reforms are starting to translate into concrete project development.
Speaking on the development, Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, said the agreement provides evidence that the Federal Government’s reforms are starting to create a pathway for large investments that are still uncertain.
Ojulari said, “The execution of the BSWAp PSC and DSA Addenda shows the effectiveness of President Tinubu’s reforms in translating policy into investment. This is about unlocking major deep water projects and demonstrating that Nigeria has a competitive fiscal framework and a clear pathway for sustainable investment in its energy sector.
“NNPC Ltd will continue to work closely with the Federal Government, our partners and other stakeholders to ensure that this project delivers maximum value to the Federation and the Nigerian people.”
The project partners also announced the successful completion of the Pre-Front End Engineering Design phase of the project, another step towards the proposed development to a more detailed Front End Engineering Design stage.
According to the statement, the completion of Pre-FEED work has helped mature the technical and commercial scope of the project and positioned it for further engineering activities, subject to approvals and other governance requirements.
The partners say a bidder has emerged as the preferred contractor for the Floating Production Storage and Offloading vessel planned for the Bonga Southwest/Aparo development.
The FPSO is envisioned as a central offshore facility to process, store and export crude oil from the field. However, NNPC and its partners stressed that identification of a preferred bidder does not mean final contract award.
The statement said the selection is still dependent on completion of “applicable partner, regulatory, assurance and governance processes,” while Engineering, Procurement, Construction and Installation contracts ultimately require further approval.
However, the emergence of a preferred bidder provides the basis for the FPSO concept to progress to the FEED stage and for the further engineering and commercial work required to mature the project towards FID.
With an estimated lifetime investment of between $15 billion and $21 billion, the Bonga Southwest/Aparo project could be one of the largest investments in Nigeria’s oil and gas industry in recent years.
Beyond projected crude oil and gas production, the project is expected to generate additional government revenues and foreign exchange, while creating opportunities for Nigerian companies involved in engineering, fabrication, offshore construction, logistics and other services.
NNPC said the development will also deepen local content participation through increased contracting opportunities for domestic companies and suppliers. He added that the project is expected to strengthen local fabrication, marine and engineering capabilities, facilitate technology transfer and support skills development.
Once operational, the Bonga Southwest/Aparo project is expected to become a major new production center and contribute to Nigeria’s ambition to sustainably increase oil and gas production.
