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Shell delays expansion work at Nigeria’s Bonga oil field by two years: sources

S&P Global/Platts

Shell delays expansion work at Nigeria’s Bonga oil field by two years: sources

Shell has delayed expansion work at its Nigerian offshore Bonga field by another two years, dealing a major blow to the West African country’s quest to grow its crude production after a series of technical and operational setbacks, sources close to the project said Feb. 2.

t was only in May 2021 that Shell, along with its partners, signed a deal with state oil company Nigerian National Petroleum Company Ltd (NNPC) in the deepwater oil block Oil Mining Lease 118, clearing the path to a major expansion of the country’s Bonga oil and gas field.

The development had previously been shelved due to a long-standing tax dispute with Shell, the operator of the field.

After the dispute was resolved, Shell once again invited bids for the construction of a new floating production storage and offloading (FPSO) unit for its Bonga Southwest deepwater oil field in Nigeria.

However, the response to the tender had been underwhelming, a senior official at NNPC told S&P Global Platts.

“There has been a delay in progressing with the tendering process for the Bonga Southwest field. The tenders have been put on hold till around 2024,” the official said.

A spokesman for the Shell Petroleum Development Company, Nigeria confirmed that the contract award for the construction of the 150,000 b/d Bonga Southwest FPSO had been put on hold. “The Bonga Southwest has been deferred,” he said, declining to offer further details.

However, sources at NNPC and Shell said delays could be related to a change in Shell’s upstream strategy as part of its net zero ambitions.

Shell is Nigeria’s biggest oil producer, but relations have soured in recent years due to commercial and security issues.

In May 2021, Shell CEO Ben van Beurden told investors the company was focusing more on its Nigerian deepwater and gas assets after it deemed its onshore oil portfolio in Nigeria “no longer compatible” with its strategic ambitions, which include a focus on climate change and net zero carbon strategy. The energy major is currently in talks with the government to sell at its onshore oil assets.


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