*Two years after stakeholders agreed to speed up project execution
Despite the gloomy future of fossil fuels as the world increasingly shifts to renewable and cleaner energies to save the global climate, Nigeria still foot drags in producing its huge hydrocarbon resources locked below the subsurface.
One of such places with huge oil resources is the Bonga South West/Aparo (BSWA) field, which is operated Shell Nigeria Exploration and Production Company (SNEPCo). The oil field is located in oil mining lease (OML) 118 and extends into OMLs 132 and 140.
Going by the assurances stakeholders in the project, including the Federal Government represented by the Nigerian National Petroleum Corporation (NNPC), gave Nigerians in 2019, the nation should be expecting t first oil from the field. Two years after, the assurances remain a mirage as the project development has been forgotten.
The BSWA deepwater project, according to the former Minister of State for Petroleum, Dr. Ibe Kachikwu, will cost $10 billion with numerous value additions in-country, including job creation, skills acquisition and capacity development for Nigerians.
Also, according to a top industry source, on February 12, 2019, stakeholders in the BSWA project rose from a meeting with a decision to quicken taking of the Final Investment Decision (FID) on the project. The source noted that very soon they would announce invitation to tender (ITT) for the project.
The source who was part of the stakeholders’ meeting held in Lagos, said: “Shell Nigeria Exploration and Production Company Limited (SNEPCo), the deepwater arm of Shell in Nigeria, has concluded OML 18 negotiations with the Nigerian National Petroleum Corporation (NNPC).
“We now have a clear commercial framework, aligned with stakeholders and the confidence to move forward the Bonga South West Aparo FID. This is a key milestone for the project and the development of Nigeria’s deep water oil and gas industry.
“SNEPCo is pleased to announce NNPC and its unit partners involved in BSWA development, have reached agreement on the key commercial terms necessary to move the development forward.
“This agreement covers related production sharing contract interpretation disputes. It also sets an incentivizing and fair framework for developing this world class opportunity whilst opening further opportunities in the prolific Nigerian deepwater oil and gas industry.
“We look forward to realising the significant benefits to the Nigerian state, the Nigerian deepwater oil and gas construction contractors, their workforce and the investing parties as we progress towards the investment decision, construction and startup.
“Following the OML 118 Heads of Terms agreement, we are pleased to announce the release of the BSWA Invitation to Tender, where Nigerian and international companies on the agreed bid list are requested to bid for the various contract packages that make up engineering procurement and construction (EPC) of the BSWA project.
“This is an important step that will allow ourselves, the government and investing parties to understand the cost of the project and if within expectation, take the project to a final investment decision.”
On when the FID will be taken, the stakeholders identified competitive bidding as the first stage, followed by evaluation and sanctioning activities.
On April 17, 2018, President Muhammadu Buhari attended a meeting with a delegation from Royal Dutch Shell Plc, led by its Chief Executive Officer Ben Van Beurden, in London, where a decision was reached that the oil giant and the NNPC would begin the implementation of projects that have been on the drawing board for several years.
In June 2017 SNEPCo also organised multi-stakeholder local content workshops on the potential opportunities the project may bring to Nigerian service providers. This was in fulfillment of mandatory requirements by the Nigeria Content Development and Monitoring Board.
The project is expected to add 150,000 barrels per day of crude oil to Nigeria’s production when it begins to produce.
The BSWA also extends into OMLs 132 and 140, operated by Chevron, where it is called Aparo. The project includes the construction of a new floating production, storage and offloading (FPSO) facility.
SNEPCo is the operator of the BSWA project with NNPC, Esso Exploration & Production Nigeria (Deepwater) Limited, Total E&P Nigeria Limited, Nigerian Agip Exploration Limited, Texaco Nigeria Outer Shelf Limited, Star Ultra Deep Petroleum Limited, Sasol Exploration and Production Nigeria Limited as shareholders.
