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NNPC, Shell to begin $10bn Bonga Southwest projects



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The Nigerian National Petroleum Corporation (NNPC) and Shell Nigeria Exploration and Production Company (SNEPCo) have been directed to commence the tendering process for the execution of the $10 billion Bonga South West/Aparo (BSWA) deepwater project, National Daily has gathered.
In a letter obtained by National Daily with reference number HMS/MPR/027/Vol.1/096, dated May 9, 2018 and addressed to Baru, Minister of State for Petroleum, Dr. Ibe Kachikwu, stated that his directive was in furtherance to the meeting held between the president and the Shell executives in London.
The London meeting, which was facilitated by Kachikwu, also had in attendance the Group Managing Director of the NNPC, Dr. Maikanti Baru.
The meeting was said to have presented an opportunity to open investment talks of up to $15 billion to be invested by Shell in Nigeria.
Estimated to cost about $10 billion, the Bonga South West/Aparo project, which has been on the drawing board for several years, is being executed by SNEPCo under a Production Sharing Contract (PSC) arrangement with the NNPC.
First oil from the project, which is expected to add 225,000 barrels per day of crude oil to Nigeria’s daily production, is expected in 2021 or 2022.
Other key projects that have also suffered delays in Nigeria’s oil and gas industry include: the 120,000bpd Shell and Eni’s Zabazaba/Etan project in the disputed Oil Prospecting Lease (OPL) 245, ExxonMobil’s 140,000bpd Bosi project, ExxonMobil’s 110,000bpd Uge project and Chevron’s 100,000bpd Nsiko deepwater project.
The delays in the execution of these projects, which are estimated to cost about $23 billion, are largely caused by the lack of clarity of terms as a result of the non-passage of the 18-year-old Petroleum Industry Bill (PIB), and inadequate funding.
“Please recall the meeting held between His Excellency, Mr. President and Royal Dutch Shell on April 17, 2018 in London, on important matters, including the Bonga South West project. In furtherance to the meeting, NNPC is required to urgently conclude all processes leading to the execution of the Bonga South West project by June 18, 2018,” Kachikwu said in the letter.
Following Kachikwu’s directives, the NNPC, through its investment arm, the National Petroleum Investment Management Services (NAPIMS), has also approved the Invitation to Tender (ITT) documents prepared by SNEPCo for the six packages in the project.
Granting the approval through a letter dated June 6, 2018 with reference number NAP/GGM/02.13 and signed on behalf of the NNPC by the Group General Manager (GGM) in charge of NAPIMS, Mr. Roland Ewubare, the corporation also informed SNEPCo, “All necessary updates to ITT documents through the tendering stage will require NAPIMS’ approval.”
Buhari and the Shell executives were said to have discussed the Bonga offshore oil field development and the expansion of liquefied natural gas projects.
Shell had confirmed the meeting, saying: “Both projects are subject to a future final investment decision and we continue to work with our partners and the government towards that in each case.”
The BSWA project includes the construction of a new Floating Production, Storage and Offloading (FPSO) facility with an expected peak production of 225,000 barrels of oil per day.
National Daily gathered that 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.