Saipem wins key role in Shell’s Bonga North deepwater oil project

Saipem, alongside KOA Oil & Gas and AVEON Offshore, has secured a pivotal contract for the Bonga North Project, an ambitious venture that seeks to enhance deepwater oil production in Nigeria. Awarded by Shell Nigeria Exploration and Production Company Limited (SNEPCo), the contract is valued at approximately $1 billion, with Saipem’s share amounting to $900 million.

This project represents a significant step in Nigerian oil output, leveraging innovative solutions and strategic partnerships to optimise the country’s offshore energy capacity.

Strategic Scope of Bonga North Project

The Bonga North Project involves connecting newly drilled wells to the Bonga Floating Production Storage and Offloading (FPSO) facility. Saipem’s responsibilities include the engineering, procurement, construction, and installation (EPCI) of critical components such as risers, flowlines, subsea umbilicals, and other offshore energy infrastructure.

A key focus of the project is local engagement, with design and fabrication efforts involving Nigerian suppliers and subcontractors, aligning with government objectives to strengthen domestic capabilities in the energy sector.

This contract not only highlights Saipem’s expertise in deepwater oil production but also extends its operational portfolio in West Africa through 2027. The company’s longstanding presence in Nigeria, dating back to the late 1960s, reinforces its leadership in complex offshore projects.

Subsea Technology Integration by TechnipFMC

In addition to Saipem’s role, TechnipFMC has been awarded a complementary contract by SNEPCo to deliver advanced subsea technology integration for the Bonga North Project. Valued between $250 million and $500 million, this initiative includes the design and manufacturing of cutting-edge Subsea 2.0 production systems.

These systems will feature subsea tree systems, manifolds, jumpers, controls, and related services designed to ensure optimal performance in the challenging conditions of deepwater oil production. By integrating these systems into the project, TechnipFMC aims to enhance efficiency and bolster production in the prolific OML 118 block, where the project is located.

Leveraging Offshore Energy Infrastructure

The Bonga North Project will connect to the existing Bonga FPSO facility, a cornerstone of offshore energy infrastructure in Nigeria since its commissioning in 2005. Positioned at water depths exceeding 1,000 metres, the FPSO has a peak production capacity of 225,000 barrels per day. In 2023, it celebrated the milestone of producing its one-billionth barrel of oil, underscoring its critical role in Nigerian oil output.

By employing a subsea tie-back approach, Shell and its partners aim to expand production efficiently while minimising costs. This strategy, often referred to as near-field development, enables the utilisation of existing assets without the need for entirely new infrastructure.

Enhancing Nigerian Oil Output

The Bonga North Project is expected to significantly boost Nigerian oil output, with peak production anticipated at 110,000 barrels of oil per day. Over its lifecycle, the project aims to recover more than 300 million barrels of oil equivalent (boe), solidifying its importance within Shell’s upstream portfolio.

The initiative also aligns with the Nigerian government’s energy goals, fostering local partnerships while enhancing the country’s position as a major player in the global energy market. The integration of subsea technology ensures not only enhanced efficiency but also adherence to sustainable practices in deepwater oil production.

Strategic Implications for Energy Transition

As the global energy industry navigates challenges in sustainable development, the Bonga North Project exemplifies how existing offshore energy infrastructure can be optimised for long-term gains. Shell’s focus on leveraging advanced subsea technology integration demonstrates its commitment to innovation and efficiency.

Moreover, by expanding production capacity without constructing entirely new facilities, the project aligns with industry-wide goals of reducing environmental impact while meeting global energy demands.

The collaboration between Saipem, TechnipFMC, and Shell underscores the critical role of strategic partnerships in ensuring the success of high-stakes projects like the Bonga North Project.