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.
