Nigeria Grants Shell Production Tax Credit to Push Bonga South West Project Forward
Nigeria’s Federal Government has approved an $11.50 per barrel production-linked tax credit for Shell Plc’s Bonga South West Aparo deep offshore oil project, as part of a wider package of incentives aimed at advancing the development.
The approval follows President Bola Ahmed Tinubu’s endorsement of investment-linked measures for the project, which the Presidency said are designed to encourage fresh capital, increase oil production and improve the competitiveness of Nigeria’s upstream petroleum sector.
According to a statement from the Presidency, the incentives were approved after President Tinubu met with a Shell delegation led by the company’s Global Chief Executive Officer, Wael Sawan, at the State House in Abuja.
The government said the measures are tied to investment outcomes and are intended to support projects that deliver additional production, employment opportunities, foreign exchange inflows and greater participation by Nigerian companies.
The $11.50 per barrel production-linked tax credit forms part of the fiscal support package designed to improve the commercial outlook of the Bonga South West development.
The decision comes as Nigeria continues efforts to attract major investments into its oil and gas industry. Several large upstream projects have faced delays due to high development costs, regulatory challenges and changing investment conditions, making fiscal certainty an important factor for offshore developments.
Bonga South West is one of Nigeria’s significant deepwater oil projects and is expected to contribute to future crude production if developed. The project is part of the country’s broader strategy to maximise its offshore resources and encourage long-term investment in the energy sector.
The Presidency said the approved incentives are structured to support economic benefits beyond oil production, including job creation and opportunities for Nigerian businesses involved in areas such as engineering, fabrication, logistics and other oil and gas services.
Shell’s Chief Executive Officer, Wael Sawan, welcomed the government’s efforts to improve the investment environment and reaffirmed the company’s interest in Nigeria’s energy sector, according to the Presidency.
President Tinubu also directed relevant government agencies to complete the gazetting of the incentives in line with existing laws and regulations.
The approval marks another step in Nigeria’s push to attract international energy investment and create conditions that encourage the development of major offshore oil projects.
