Shell Lifts Stake in Nigeria’s Bonga Field to 65% as Experts Hail Renewed Confidence in Deep-Water Sector
Shell Nigeria Exploration and Production Company (SNEPCo), a subsidiary of Shell plc, has completed the acquisition of an additional 10% interest in the OML 118 Production Sharing Contract (OML 118 PSC), raising its stake in the landmark Bonga deep-water field from 55% to 65%.
The transaction, which follows an earlier announcement and aligns with Shell’s strategy to invest in high-value upstream assets, comes on the heels of the company’s Final Investment Decision (FID) on the Bonga North development project. Analysts say the move signals strengthened confidence in Nigeria’s deep-water environment at a time when global capital is shifting toward more cost-resilient assets.
A Deep-Water Legacy Reinforced
Bonga, commissioned in 2005 as Nigeria’s first major deep-water oil field, transformed the country’s offshore production landscape and influenced the development of subsequent large-scale projects such as Agbami, Usan, and Egina.
The Bonga partnership now stands as follows:
SNEPCo – 65% (Operator)
Esso Exploration & Production Nigeria Ltd. – 20%
Nigerian Agip Exploration Ltd. – 15%
Agip’s exercise of its pre-emption rights reduced the additional equity available to Shell from 12.5% to 10%.
Shell says the acquisition supports its goal of increasing combined Integrated Gas and Upstream output by 1% annually to 2030, contributing to the company’s target of sustaining around 1.4 million barrels per day of global liquids production.
Economist: “A Confidence Boost Nigeria Has Been Waiting For”
Reacting to the development, Mr. Celestine Ukpong, an economist and energy markets analyst, described Shell’s move as a confidence-building signal for Nigeria’s investment environment—especially in the aftermath of production shortfalls and waning investor sentiment.
“When a global major like Shell expands its equity in a mature deep-water asset, it sends a strong message to the international market that Nigeria remains a viable frontier for long-term capital,” Ukpong noted.
“Deep-water assets are less vulnerable to insecurity challenges and offer stable output. This acquisition could help Nigeria rebuild investor confidence and potentially unlock new commitments from other international oil companies.”
Ukpong added that offshore investment is critical as Nigeria pushes to restore production volumes and strengthen foreign exchange inflows.
Accountant: “Positive Fiscal Signals for Government Revenue”
Chartered accountant and fiscal analyst Peter Adebayo emphasized the financial implications of Shell’s increased stake, particularly for Nigeria’s government revenue and cost recovery models under the PSC arrangement.
“An expanded stake by Shell means greater operational responsibility and, ultimately, higher revenue flows tied to increased efficiency and production levels,” Adebayo explained.
“Because Bonga is a high-performing deep-water field with significant yield potential, any enhanced investment by the operator could translate into improved fiscal returns for the federation through royalties, taxes, and production sharing.”
Adebayo also highlighted that the development could support medium-term foreign exchange stability if production volumes rise under the Bonga North expansion.
Industry Significance: A Renewed Vote of Confidence
Experts agree that Shell’s decision arrives at a crucial time for Nigeria, as the country works to stabilize crude oil output, meet OPEC quotas, attract fresh offshore investments and reduce the revenue impact of declining onshore production.
With Bonga North in progress and ongoing optimization of existing Bonga infrastructure, the increased stake positions Shell, and Nigeria, for potentially stronger output trends over the next decade.
While Shell acknowledges the risks associated with global market conditions, regulatory environments, and energy transition pressures, the strengthened ownership signals long-term confidence in Nigeria’s offshore future.
Shell has increased its stake in Nigeria’s Bonga deep-water field to 65%, a move welcomed by economist Celestine Ukpong and chartered accountant Peter Adebayo, who say the acquisition boosts investor confidence and offers strong fiscal benefits for Nigeria.
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