December 12, 2023 [Rigznoe]- Shell PLC has pledged $6 billion in investment for Nigeria, the bulk of which is for the expansion of the British energy giant’s Bonga oil field project, according to President Bola Tinubu.
Tinubu disclosed the investment by Shell after a meeting in Nigeria with company representatives.
“We are very focused on resolving all investment-related issues. There is no bottleneck that is too difficult for us to remove in our determined march toward making Nigeria the African haven for large-scale investment in all key sectors”, Tinubu told the delegation, according to the official report of the meeting on the presidential website. “We need each other”.
Zoe Yujnovich, Shell director for global integrated gas and upstream, told the other side the company is refocusing resources into the deepwater and gas sectors.
“She outlined the company’s dedication to the development of the gas value chain in the country, including a substantial commitment of $1 billion over the next five to ten years, aimed at unlocking gas resources for domestic use and the Nigeria Liquefied Natural Gas project”, stated the official press release.
“Furthermore, Ms. Yujnovich announced an imminent $5 billion investment opportunity in the Bonga North project off the shores of Nigeria, located in the deep water”.
The budget for Bonga North is up from an earlier expectation of nearly $3 billion, based on a figure provided by the Nigerian Content Development and Monitoring Board (NCDMB).
Nigeria has set a target of over $50 billion worth of oil development projects in the next five years, according to the NCDMB.
The projects were outlined at the Nigerian Oil and Gas Opportunity Fair (NOGOF) in May, which saw participation from international and local companies including Shell and the Nigerian National Petroleum Company Ltd. (NNPC), according to a press release by organizer the NCDMB.
“Some of the opportunities are from the indigenous players, some by NNPC Ltd and the international oil companies. If you put them together, in the next five years they would exceed $50 billion that would be invested in the Nigerian oil and gas industry”, then NCDMB Executive Secretary Simbi Kesiye Wabote told the gathering, as quoted in the news release.
One of the projects is Shell Nigeria Exploration and Production Co’s expansion of its Bonga development. The already-operational northwest section of the field can produce about 65,000 oil-equivalent barrels a day, according to Shell.
“Bonga Southwest, which Shell talked about, is almost about $7 billion to $8 billion”, Wabote said. “Shell also talked about Bonga North, which they might take final investment decisions early next year and is almost $3 billion”.
Wabote, replaced last week, acknowledged oil development in the West African country has been hit by financial, security and regulatory hurdles.
Of projects proposed at previous NOGOFs, most “have come to fruition” but “others are challenged by security concerns, final investment decisions challenges, bankability and regulatory requirements and approvals”, Wabote said, as quoted in the NCDMB press release.
Affirming Shell’s presence in Nigeria, Yujnovich told Tinubu, “I have made commitments to our investors that we will continue to invest in gas and oil”.
“In Nigeria, I see all the conditions to continue to make this partnership stronger”.
Shell’s reassurance comes after another energy major, Equinor ASA, made a decision to exit Nigeria.
Announcing the move November 29 Equinor said it was selling all its assets in Nigeria, including its stake in the Agbami oil field, to Chappal Energies Mauritius Ltd. It did not disclose the value of the transaction.
Norway’s majority state-owned Equinor said it was giving up Equinor Nigeria Energy Co. to focus on core areas.
“Equinor has been present in Nigeria since 1992 and has played a significant role in developing Nigeria’s largest deep-water field, Agbami”, it said in a news release at the time, noting the field has produced over one billion barrels of oil since startup 2008.
Equinor holds a 20.21 percent stake in the Niger Delta’s Agbami, which is operated by Chevron Corp. with a 67.3 percent interest. Prime 127 Nigeria Ltd. holds the remaining 12.49 percent.
The world’s biggest oil discovery in 1998, Agbami holds an estimated 900 million barrels of recoverable volumes, according to information from Chevron.
Equinor also operates exploration license OML 129 with a 53.85 percent share. Three out of four wells drilled here yielded discoveries according to a Wood Mackenzie report October 5, which classified Bilah, Nnwa and Sehki as non-commercial discoveries.
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