Shell advances Nigeria’s offshore energy with Bonga North deep-water development

Shell Nigeria Exploration and Production Company Limited (SNEPCo), a subsidiary of Shell plc, has made a decisive move in its Nigerian operations by approving the final investment decision (FID) for the Bonga North deep-water project. This ambitious development reinforces Shell’s strategic focus on deep-water oil production while sustaining its contributions to Nigeria’s offshore energy industry.

The Bonga North project will be a subsea tie-back integrated into the existing Bonga Floating Production Storage and Offloading (FPSO) facility. With Shell holding a 55% operating interest in Bonga, the project aims to expand oil output through a combination of newly drilled wells, subsea hardware installations, and upgrades to the FPSO facility.

What Makes the Bonga North Project Significant?

The Bonga North deep-water development will involve the drilling and activation of 16 wells — eight production wells and eight water injection wells — to ensure sustained output. Shell projects the development will recover more than 300 million barrels of oil equivalent (boe) over its lifecycle.

At its peak, the project is expected to produce 110,000 barrels of oil per day, a significant boost to Shell’s existing upstream operations in the region. The first oil output from the Bonga North project is anticipated by the end of the decade, contributing to Shell’s long-term cash flow targets and solidifying its upstream growth strategy.

Shell’s Integrated Gas and Upstream Director, Zoë Yujnovich, highlighted the importance of this decision, describing the investment as essential for maintaining stable liquids production within Shell’s upstream portfolio. She noted that projects like Bonga North play a critical role in achieving sustained performance and cash generation over the next decade.

Sustaining Offshore Oil Production in Nigeria

The Bonga FPSO facility, located within Nigeria’s OML 118 block, operates in water depths exceeding 1,000 meters and has long served as a cornerstone of Nigeria’s offshore oil production. Since its commissioning in 2005, the facility has delivered consistent performance, with a peak production capacity of 225,000 barrels per day. Notably, the Bonga field celebrated its one-billionth barrel of crude oil milestone in 2023, further cementing its role as a reliable contributor to Nigeria’s energy output.

The expansion through the Bonga North project will leverage this existing infrastructure, which is a cost-efficient approach for Shell and its partners. This model of subsea tie-back developments highlights Shell’s strategy of maximizing near-field opportunities to drive deep-water production growth without requiring entirely new infrastructure investments.

Strong Partnerships Driving Bonga North’s Success

The Bonga field operates through a collaborative partnership led by Shell Nigeria Exploration with a 55% interest. Key partners in the development include:

Esso Exploration and Production Nigeria Ltd. (20%)

Nigerian Agip Exploration Ltd. (12.5%)

TotalEnergies Exploration and Production Nigeria Ltd. (12.5%)

The joint venture operates on behalf of the Nigerian National Petroleum Company Limited (NNPC), showcasing Nigeria’s commitment to attracting international oil and gas investments while fostering robust partnerships.

How Does Bonga North Fit into Shell’s Strategy?

The Bonga North project is a clear reflection of Shell’s focus on high-value, low-cost developments that align with its capital discipline. The project’s anticipated internal rate of return (IRR) is expected to exceed Shell’s established hurdles, reinforcing its position as a profitable upstream opportunity.

Shell continues to prioritize deep-water oil production as a key pillar of its global operations, capitalizing on opportunities to drive efficiency and growth through existing facilities like Bonga. By streamlining processes and leveraging technical expertise, Shell aims to maintain its leadership in the offshore energy sector while delivering sustainable, cash-generating projects.

Future Outlook: Nigeria’s Offshore Energy Potential

Nigeria remains one of the most promising frontiers for offshore energy developments. Projects like the Bonga North deep-water development demonstrate the untapped potential within Nigeria’s waters and the opportunity for international oil companies to collaborate with local stakeholders for mutual growth.

As global energy demand evolves, Shell’s strategic investment in Bonga North reflects confidence in Nigeria’s ability to deliver long-term production stability. With recoverable resources exceeding 300 million barrels of oil equivalent, the project underscores Nigeria’s importance in Shell’s upstream portfolio and its ability to sustain significant energy output for years to come.

The approval of the Bonga North project marks a major step forward for Shell in its Nigerian operations. By unlocking new production volumes, sustaining existing assets, and fostering strategic partnerships, the project aligns with Shell’s vision of balancing short-term efficiency with long-term value creation.

For Nigeria, the development enhances its reputation as a key player in the offshore energy sector, attracting critical investments while driving innovation in deep-water oil production.