(Oil Price) – Shell’s Nigerian subsidiary has approved the Bonga North deep-water project off the coast of Nigeria, the UK-based supermajor said on Monday, announcing the final investment decision for the development.
The Bonga North project will be a subsea tie-back to the Shell-operated Bonga Floating Production Storage and Offloading (FPSO) facility which Shell operates with a 55% interest.
The project will sustain oil and gas production at the Bonga facility, Shell said.
Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent (boe) and will reach a peak production of 110,000 barrels of oil a day (bpd), with first oil anticipated by the end of the decade, the supermajor added.
“This is another significant investment, which will help us to maintain stable liquids production from our advantaged Upstream portfolio,” said Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director.
The announcement of the FID came a day after Nigeria’s maritime agency said this weekend that an oil spill had occurred at Shell’s Bonny loading terminal in Nigeria’s Delta region after a pipeline ruptured. Shell’s local unit has shut down the affected pipeline.
Shell is also seeking to sell its onshore assets in the largest African OPEC producer.
Early this year, Shell said it had reached an agreement to sell its Nigerian onshore subsidiary to Renaissance, a consortium of five companies for US$1.3 billion.
At the time, Shell’s Yujnovich said that “This agreement marks an important milestone for Shell in Nigeria, aligning with our previously announced intent to exit onshore oil production in the Niger Delta, simplifying our portfolio and focusing future disciplined investment in Nigeria on our Deepwater and Integrated Gas positions.”
But the deal has yet to be approved.
In October, Nigeria’s upstream regulator blocked the sale, although it approved a separate transaction in which ExxonMobil sold its onshore operations to Nigerian firm Seplat Energy.
By Tsvetana Paraskova for Oilprice.com
