The Shell companies in Nigeria (SCiN) have reached out to the Nigerian Content Development and Monitoring Board (NCDMB) in their quest for support in fast-tracking the advancement of three major oil and gas initiatives within the country including Bonga North deep water field, the HI and HA gas fields. A team led by Osagie Okunbor, Chairman of SCiN, instilled confidence in the public by stating that Shell’s presence in Nigeria is unwavering despite the ongoing divestment. They stated that it was only a strategic shift solely targeting the company’s shareholding structure, guaranteeing that its operations and workforce will remain unaffected.
Okunbor expressed the company’s resolve to make the Final Investment Decision (FID) on several major projects this year (2024), thereby bringing forth substantial advantages for both the Nigerian Oil and Gas Industry and the overall national economy. Okunbor hinted that the Bonga North endeavour is set to be a tie-back initiative, anticipated to unleash approximately 350 million barrels of oil equivalent and establish a further 15 years of longevity for the Bonga Floating Production Storage and Offloading (FPSO) facility.
SNEPCO is determined to expedite the Bonga North project.
In his statement, he highlighted the substantial advancements achieved by the company in the HI and HA projects. These ambitious endeavours are projected to provide 50 percent of the necessary gas for the seamless functioning of the Train 7 project, an ongoing development by the Nigeria Liquefied Natural Gas (NLNG). Emphasizing the urgency, he said it is important to expeditiously execute the gas projects to prevent any postponement of the Train 7 operation timeline. Okunbor expressed his gratitude to NCDMB for their valuable support in the company’s diverse ventures. He also urged the board to expedite the approval process so as to ensure the new projects progress swiftly and are fully implemented.
According to him, the projects’ financial aspects presented significant difficulties, prompting a crucial need for meticulous handling of budgetary allocations for both domestic and international aspects. Mrs. Elohor Aiboni, the Managing Director of Shell Nigeria Exploration and Production Company (SNEPCO), emphasized the company’s determination to expedite the Bonga North project’s development, aiming to augment the nation’s crude oil output. Felix Omatsola Ogbe, the Executive Secretary of NCDMB, expressed confidence in the organization’s ability to maintain its current pace in reviewing and approving oil and gas projects. This is done by adhering to the specific deadlines outlined in the Service Level Agreement (SLA), established to reduce contracting process for such projects.
$6b worth of investment was committed for the Bonga oil field project.
Ogbe called upon the foreign oil and gas corporations operating in Nigeria to adhere to the criteria outlined in the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, as well as maintain utmost openness by disclosing their project strategies to the governing body. He proposed embracing a win-win approach when carrying out oil and gas initiatives, ensuring that NCDMB fulfils its mission while simultaneously generating employment opportunities for Nigerian locals through involvement of indigenous oil service companies.
Back in December 2023, Shell revealed its commitment of $6 billion worth of investment primarily for the expansion of the Bonga oil field project, thereby fortifying Nigeria’s energy sector. The bulk of this investment fund, specifically $5 billion, is dedicated for offshore oil investment opportunities. Meanwhile, the remaining $1 billion investment fund is set aside for increasing the country’s natural gas output over the next five to ten years. This ambitious move seeks to meet the growing domestic demand for natural gas while also boosting exports.
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It should be noted that Bonga North is a conventional oil development located in deep water in Nigeria, with a water depth of around 3,346 feet, and operated by Shell Nigeria Exploration & Production. Commercial production from the Bonga North conventional oil development project is currently in the feasibility stage and is projected to commence in the year 2025, with a forecast to reach its highest point in 2026. According to economic projections, the production will continue until the field reaches its economic limit in the year 2063.