Royal Dutch Shell says it will make final investment decision (FID) on the development of Nigeria’s Bonga Southwest deep water oilfield in 2019.
TheCable Petrobarometer had reported that development of the oilfield would be part of the $15 billion investment on oil and gas projects Shell planned for the end of 2018.
Reuters reports that the project, with an expected output of 180,000 barrels per day (b/d), will generate profit at below $50 a barrel, according to Bayo Ojuli, managing director of Shell Nigeria Exploration and Production Company (SNEPCo).
Ojuli said that negotiations are ongoing between the oil giant and the Nigerian government for a production sharing contract (PSC) which will determine the feasibility of the project. Negotiations will be concluded at the end of the year, he said.
Located in Oil Mining Licence (OML) 118 and extending to OMLs 132 and 140, FID was delayed on the Bonga project to allow SNEPCo and its co-venture partners to “explore more efficient and cost-effective ways of implementing the project,” Bamidele Odugbesan, Shell’s spokesman in Nigeria said in May.
Speaking at the Nigerian Oil and Gas conference in June, Maikanti Baru, group managing director of the Nigerian National Petroleum Corporation (NNPC), said the state oil firm was firming up contract terms with Shell on the Bonga project.
“We intend to sanction the multibillion dollars Bonga South West/Aparo (BSWA) project as soon as we conclude an agreement on the Heads of Terms with SNEPCO on the various pending PSC Arbitration disputes,” he said.
“This will jump-start the resolution of all the other PSC Arbitration Disputes.”