Shell eyes $20 billion deepwater oil investment in Nigeria’s Bonga South West project
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Shell Plc and its partners in Nigeria are moving forward with plans to develop a major deepwater oil project that could involve around twenty billion dollars in investment, a commitment that reflects renewed international confidence in Africa’s largest crude producer. The proposal centers on the Bonga South West deepwater field off the coast of the Niger Delta, where Shell and several global energy companies are working with the Nigerian government to bring the project closer to a final investment decision.
The Bonga South West opportunity
Located in deep offshore waters in the prolific Niger Delta region, the Bonga South West field is estimated to hold about eight hundred and twenty million barrels of recoverable oil reserves with a potential peak production capacity of up to two hundred and twenty thousand barrels per day. If Shell and its partners proceed to a full investment decision, the venture could become one of the largest energy investments in Nigeria in recent years.
Shell’s Chief Executive Officer Wael Sawan has said that the project presents a compelling opportunity for foreign direct investment. According to statements shared by Nigeria’s presidency, about half of the proposed twenty billion dollars would be for capital expenditure, with the remainder covering operating expenses and other domestic expenditures that would flow through the Nigerian economy.
Partnership and government support
Shell is not alone in this endeavour. The field’s development involves a consortium that includes ExxonMobil, TotalEnergies, Eni and the state owned Nigerian National Petroleum Company. The cooperation of these partners underscores the international interest in Nigeria’s deepwater resources.
A significant factor in the project gaining traction has been efforts by the Tinubu administration to improve Nigeria’s investment climate. Targeted incentives approved by President Bola Tinubu are intended to bolster confidence among global energy companies considering long term investment in the country. The incentives are tied to development milestones and are designed to make large scale projects more viable.
Nigeria’s government has publicly framed this push as both a vote of confidence in the Nigerian oil sector and a demonstration of its commitment to attracting reliable long term investment. These changes appear to have encouraged Shell to accelerate its evaluation of the Bonga South West project, with discussions ongoing about timing for a final investment decision that some officials hope could occur in 2027.
Economic and strategic importance
The potential investment comes at a time when many oil majors are balancing capital discipline with the need to maintain future production. Sluggish oil prices in recent years have made it more difficult to justify new large projects, but the outlook for long term petroleum supply coupled with targeted reforms in host countries like Nigeria has sparked renewed interest.
For Nigeria, the stakes are high. Revenues from crude oil production remain a critical component of government income and foreign exchange earnings. Shell alone paid more than five billion dollars in taxes and other charges to Nigeria in 2024, more than any other country where the company operates. That payment marked an increase from the previous year and highlighted the continuing economic significance of the oil sector for Shell and Nigeria alike.
Beyond fiscal contributions, the development of Bonga South West could create employment opportunities across the supply chain, stimulate demand for local services and support fabrications yards that have been idle in recent years. Industry observers note that deepwater projects also require substantial technical and logistical support, which can generate long term benefits for domestic firms and workers engaged in construction, maintenance and operations.
Environmental and corporate strategy considerations
While the investment could bring economic benefits, Shell’s strategy also reflects a broader corporate shift. The company is in the process of exiting onshore production in the Niger Delta, part of an effort to simplify its portfolio and reduce emissions intensity as it positions itself for a transition to net zero operations by 2050. Offshore deepwater assets like Bonga South West typically have lower emissions footprints compared to older onshore ventures that have been subject to environmental and community controversies in the region.
This shift has been controversial at home and abroad, but for Shell it represents a pivot to resources that can generate returns while aligning with evolving environmental standards and expectations. The company has stressed that it will continue to invest in its upstream business where conditions justify doing so, noting that disciplined capital allocation remains central to its strategy.
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