Nigeria's leading finance and market intelligence news report.

Shell clears commercial framework, ready for development of $10bn Bonga Southwest


Shell Nigeria Exploration and Production Company (SNEPCo) has concluded negotiations with the  Nigerian National Petroleum Corporation (NNPC) on the $10 billion Bonga South West Aparo  development

There is now a clear commercial framework, aligned with stakeholders and the confidence to move towards Final Investment Decision (FID).

SNEPCo has consequently announced to the Nigerian National Petroleum Corporation (NNPC) and its unit partners involved in Bonga South West Aparo (BSWA) development, that it have  reached agreement on the key commercial terms necessary to move  the development forward.

Following the Oil Mining License (OML)118 Head of Term agreement, the company has announced the  release of BSWA invitation to Tender, where Nigerian and international companies on the agreed bid list are requested to bid for the various contract packages that make up engineering procurement and construction of the BSWA projects.

An industry source that disclose this development to BusinessDay said this an important step  that will allow the companies, the government and  investing partners to understand the cost  of the project and if within expectations, take the  project to the final investment Decision.

The agreement covers related production sharing contract interpretation dispute. It also sets an incentive and fair framework for developing this world class opportunity while opening further opportunities in the prolific Nigerian Deepwater oil and gas industry.

The BSWA project includes the construction of a new Floating Production, Storage and Offloading (FPSO) unit with an expected peak production of 225,000 barrels of oil per day.

The BSWA field straddles Oil Mining Leases (OMLs) 118, 132 and 140.

However, the bulk of BSWA resources are located in OML 118 but it also extends into OMLs 132 and 140, operated by Chevron, where it is called Aparo.

SNEPCo is the operator of the BSWA project in line with the agreement between the NNPC, Esso Exploration & Production Nigeria (Deepwater) Ltd., Total E&P Nigeria Ltd., Nigerian Agip Exploration Ltd., Texaco Nigeria Outer Shelf Ltd., Star Ultra Deep Petroleum Ltd., Sasol Exploration and Production Nigeria Ltd. and Oil and Gas Nigeria Ltd.

Bayo Ojulari, Managing Director of SNEPCo  had told Reuters last year  that Shell and its partners would decide  this year on whether to go ahead with the development of the oilfield.

He added that   the project, one of the country’s largest with an expected production of 180,000 barrels of crude oil per day, would generate profit at crude oil price of below $50 per barrel.

Leave A Reply

Your email address will not be published.