Shell sees shining future for Nigeria’s deep-water production with the right conditions
CHIGOZIE AMADI
Nigeria can meet oil production targets and implement ambitious development programmes from deep-water oil and gas operations if it continues with policies to encourage investments and boost output in the sector, Managing Director, Shell Nigeria Exploration and Production Company Limited (SNEPCo,) Ronald Adams has said.
“Deep water is a compelling consideration for Nigeria if the country must meet its oil production targets and implement ambitious development programmes,” Adams said while speaking at the 9th Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) which began in Lagos on Tuesday.
According to Adams, Nigeria’s deep-water fields are home to some of the world’s most promising associated and non-associated gas reserves, with vast untapped potential that could play a vital role in powering Nigeria’s future, supporting cleaner energy and contributing to global emissions reduction. “This will require a favourable investment climate to attract capital and innovation to develop these gas resources responsibly and sustainably, ensuring long-term benefits for the country in meeting its energy and global sustainability goals,” he said.
Adams welcomed reforms by government to attract investments especially the signing of three executive orders in February last year on tax incentives, local content compliance requirements and reduction of petroleum sector contracting costs and timelines. Tax credits were also announced for new investments in deep-water oil and gas.
The reforms, he noted, should be part of a renewed strategy to attract investments “through fiscal and regulatory policies that are fit-for-purpose, forward-looking and competitive.
He said that, for Nigeria to consistently reap the benefits from deep-water operations, it must address regulatory bottlenecks through streamlined and faster approval processes and consistent and fair policy enforcement.
Adams who spoke on Shell’s vision for unlocking Nigeria’s deep-water potential, assured that the company would continue to leverage its expertise since it pioneered production at the Bonga field in 2005 which achieved 1 billion barrels export milestone in 2023. Further developments include the FID on the $5-billion Bonga North deep-water project announced last year.
He said SNEPCo’s deep-water achievements have resulted in the payment of taxes and royalties to government, development of indigenous businesses through contract awards and implementation of social investments across the six geopolitical zones in Nigeria.
Adams added: “Shell has powered progress in Nigeria and our vision is to build on our support and help the country to achieve energy security and economic development. We will do this by continuing to take innovative approaches to deep-water development, reducing costs and ensuring better and quicker returns for all stakeholders.”
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PETAN advocates local content in Bonga North
The Petroleum Technology Association of Nigeria (PETAN) is advocating for greater local content participation in Shell’s $5.5 billion Bonga North deep water project.
It proposes $1.5 billion in contract awards to indigenous companies.
Engr. Wole Ogunsanya, PETAN Chairman, made the call on Tuesday during his keynote address at the Sub-Saharan Africa International Conference and Exhibition (SAIPEC) in Lagos.
The ongoing conference is themed ‘Building Africa’s Future: Advancing Local Content and Sustainable Development in the Oil & Gas Industry’.
Ogunsanya expressed optimism about several Final Investment Decisions (FID) recently signed in Nigeria, especially Shell’s Bonga North project, and emphasised the vital role of indigenous companies.
“Our members have over three decades of experience in the oil and gas industry as technical and service providers,” Ogunsanya said.
He added: “We possess the expertise to manage major projects across the oil and gas value chain, including deepwater ventures in Nigeria and other African nations.”
PETAN represents 60-70 per cent of Nigeria’s local content capacity, with over 100 member companies, each led by a CEO and executive directors.
Ogunsanya also highlighted that PETAN’s members are active in regions like India, the Middle East, and Africa, showcasing their broad capabilities.
“We are not asking for $3 billion but are requesting $1.5 billion in contract awards, about 25% of Shell’s Bonga North project,” Ogunsanya clarified.
He stressed that PETAN’s focus on local content development aims to encourage cooperation between multinational companies and local firms, not discourage international partnerships.
“We collaborate with international service companies, creating shared value that benefits all parties,” he affirmed.
Ogunsanya emphasised the importance of increasing indigenous companies’ involvement in Africa’s oil and gas projects, ensuring value stays within the continent.
Looking ahead, he expressed PETAN’s eagerness to contribute to the Bonga North project and other initiatives across Nigeria’s deepwater, shallow water, and onshore sectors.
Ogunsanya also commended the Nigerian Content Development and Monitoring Board (NCDMB) for its continuous support in building local capacity.
“We have strengthened our capacity with the invaluable support of the NCDMB,” he noted, adding that Africa can leverage its human and energy resources for development.
“Through PETAN’s efforts, Nigeria and Africa’s oil and gas industry are poised for growth, ensuring more opportunities remain in local hands,” he said.
