The Nigerian National Petroleum Company Limited and its partners on Monday signed agreements expected to move the proposed Bonga Southwest/Aparo project, estimated to attract up to $21bn in investment, closer to a Final Investment Decision.

The project, located in Oil Mining Lease 118, is expected to become one of Nigeria’s biggest new deepwater developments, with a projected peak production of about 175,000 barrels of oil per day and 140 million standard cubic feet of gas per day.

The NNPC Ltd and the OML 118 Contractor Parties, Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited and Nigerian Agip Exploration Limited, executed an Addendum to the OML 118 Production Sharing Contract and an Addendum to the Dispute Settlement Agreement.

The agreements give effect to new fiscal and commercial terms approved by the Federal Government to support the development of the Bonga Southwest/Aparo project.

The development is particularly significant for Nigeria, which has struggled in recent years to secure major new investments in its deepwater petroleum sector despite possessing some of Africa’s largest offshore oil and gas resources.

Unlike onshore and shallow-water operations, deepwater projects require huge upfront capital and long-term fiscal certainty, making the competitiveness of a country’s tax and commercial framework a major consideration for international investors.

The NNPC, in a statement issued by its Chief Corporate Communications Officer, Andy Odeh, said the latest agreements demonstrated the practical impact of the Federal Government’s recent reforms aimed at restoring Nigeria’s attractiveness as a destination for deepwater investment.

The statement read, “The Nigerian National Petroleum Company Limited, and the OML 118 Contractor Parties, Shell Nigeria Exploration and Production Company Limited, Esso Exploration and Production Nigeria (Deepwater) Limited, and Nigerian Agip Exploration Limited, today executed the Addendum to the OML 118 Production Sharing Contract and the Addendum to the Dispute Settlement Agreement, marking a major milestone in the advancement of the deepwater Bonga Southwest/Aparo project towards Final Investment Decision.”

“The execution gives effect to the fiscal and commercial terms approved by the Federal Government to support the development of BSWAp, and it reinforces Nigeria’s commitment to creating a competitive, stable and attractive environment for large-scale deepwater investment.”

The milestone followed President Bola Tinubu’s approval of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which was designed to improve the competitiveness of Nigeria’s deepwater fiscal regime and unlock fresh investments.

The NNPC said the execution of the addenda showed how the policy reforms were beginning to translate into concrete project development.

Speaking on the development, the Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, said the agreements provided evidence that the Federal Government’s reforms were beginning to create a pathway for major investments that had remained uncertain.

Ojulari said, “The execution of the BSWAp PSC and DSA Addenda demonstrates the effectiveness of President Tinubu’s reforms in translating policy into investment. This is about unlocking a major deepwater project and demonstrating that Nigeria has a competitive fiscal framework and a clear pathway for sustainable investment in its energy sector.”

“NNPC Ltd will continue to work closely with the Federal Government, our partners and other stakeholders to ensure that this project delivers maximum value for the Federation and the Nigerian people.”

The project partners also announced the successful completion of the project’s Pre-Front End Engineering Design phase, another step towards taking the proposed development into the more detailed Front End Engineering Design stage.

According to the statement, the completion of the Pre-FEED work had helped to mature the technical and commercial scope of the project and positioned it for further engineering activities, subject to approvals and other governance requirements.

In another indication that preparations for the project are advancing, the partners said a bidder had emerged as the preferred contractor for the Floating Production Storage and Offloading vessel planned for the Bonga Southwest/Aparo development.

The FPSO is expected to be the central offshore facility for processing, storing and exporting crude oil from the field.

However, the NNPC and its partners stressed that the identification of the preferred bidder did not amount to a final contract award.

The statement said the selection was still subject to the completion of “applicable partner, regulatory, assurance and governance processes,” while any eventual Engineering, Procurement, Construction and Installation contract would require further approvals.

The preferred bidder’s emergence, however, provides a basis for the FPSO concept to progress into the FEED stage and for further engineering and commercial work required to mature the project towards an FID.

With an estimated lifetime investment of between $15bn and $21bn, the Bonga Southwest/Aparo project could rank among the biggest investments in Nigeria’s oil and gas industry in years.

Beyond its projected crude oil and gas output, the project is expected to generate additional government revenues and foreign exchange, while creating opportunities for Nigerian companies involved in engineering, fabrication, offshore construction, logistics and other services.

The NNPC said the development would also deepen local content participation through increased contracting opportunities for indigenous companies and suppliers.

It added that the project was expected to strengthen local fabrication, marine and engineering capabilities, facilitate technology transfer and support skills development.

The latest development comes as Nigeria seeks to reverse years of underinvestment in its oil and gas industry and raise crude production through new investments in both existing and frontier assets.

The Federal Government and industry regulators have in recent months introduced a series of fiscal and regulatory measures aimed at attracting fresh capital into the petroleum sector, particularly in deepwater projects where investment decisions are often influenced by global competition and the long development cycle of offshore fields.

Once operational, the Bonga Southwest/Aparo project is expected to become a major new production hub and contribute to Nigeria’s ambition to sustainably increase its oil and gas output.

The NNPC said the signing of the agreements reflected collaboration among the Federal Government, the national oil company, regulatory agencies and the OML 118 Contractor Parties.

It added that it would continue to work with all stakeholders to advance the project “safely, competitively and responsibly, while maximising value for Nigeria and the Nigerian people.”