• President Tinubu approved incentives limited to the Bonga South West oil project.
• The project targets output of up to 150,000 barrels per day.
• The government wants a final investment decision by mid-2027.

Nigeria’s President Bola Tinubu approved targeted incentives on January 22, to accelerate the Bonga South West oil project operated by Shell. Speaking during a meeting in Abuja with a delegation led by Shell Chief Executive Officer Wael Sawan, Tinubu said the measures apply only to specific projects. They are not sector-wide incentives.

The president said these are conditional, depending on new investments and a clear increase in production. The goal is to attract investors and revive a project with the potential to produce up to 150,000 barrels of oil per day, alongside significant gas resources.

The government wants Bonga South West to reach a final investment decision before the end of Tinubu’s first term, in mid-2027. This step is seen as critical to restarting a project delayed for years by fiscal disputes and by an investment climate viewed as unattractive. The incentives were not detailed. Authorities said they will remain within the existing legal and tax framework, including the 2021 Petroleum Industry Act.

Located about 120 kilometers offshore Nigeria, in waters deeper than 1,000 meters, Bonga South West represents an investment estimated at more than $5 billion. The project sits near the Bonga field, which began production in 2005. Despite its potential, Bonga South West remained stalled for more than a decade. Falling oil prices after 2014, shifting investment priorities by international oil companies, and uncertainty around the fiscal regime all slowed progress. Previous administrations failed to reach an agreement with project partners.

For the current government, the project has strategic importance. Authorities present it as a driver of job creation, foreign currency inflows, and long-term public revenue. It is also expected to boost the participation of Nigerian firms in offshore engineering, fabrication, logistics, and energy services.

A key step in Nigeria’s effort to lift oil production

The move fits into a broader strategy to reverse the decline in Nigeria’s oil production. Over the first eleven months of 2025, output ranged between 1.38 million and 1.53 million barrels per day. This remains well below the official target of 2 million barrels per day. Since 2023, the government has introduced reforms to improve sector attractiveness. These include tax relief measures and simplified administrative procedures.

These efforts are starting to show results. Shell and its partners have invested nearly $7 billion in Nigeria in recent months, including in the Bonga North project. Other companies, such as ExxonMobil and TotalEnergies, have also revived or announced deepwater projects in the country. Bonga South West is now seen as a key test for Nigeria’s national energy strategy.

Its ability to reach a final investment decision quickly will shape the credibility of the incentives and Nigeria’s capacity to attract large offshore projects over the long term. The broader goal is to lift national output and move closer to the 2 million barrels per day target.

Olivier de Souza