By Ejekwu Chidiebere
Shell Nigeria Exploration and Production Company (SNEPCo), a subsidiary of Shell plc, has signed an agreement with TotalEnergies EP Nigeria Limited on May 28 to acquire its 12.5% stake in the OML 118 Production Sharing Contract (OML 118 PSC), an oil mining lease offshore Nigeria that includes the Bonga field. The transaction will increase Shell’s interest in the OML 118 PSC from 55% to 67.5% upon completion.
SNEPCo is the operator under the OML 118 PSC which currently produces from the Bonga field via the Bonga Floating Production Storage and Offloading (FPSO) vessel had announced the development of the Bonga North field in December 2024.
“Following our final investment decision on Bonga North last year, this acquisition brings another significant investment in Nigeria deep-water that contributes to sustained liquids production and growth in our Upstream portfolio,” says Peter Costello, Shell’s President, Upstream.
The transaction is however subject to regulatory approvals and other closing conditions. It is expected to be completed before the end of this year.
It is important to note that SNEPCo (55%) operates the Bonga field in partnership with Esso Exploration and Production Nigeria Ltd. (20%), Nigerian Agip Exploration Ltd. (12.5%), and TotalEnergies EP Nigeria Ltd. (12.5%), on behalf of the Nigerian National Petroleum Company Limited (NNPC).
After completion of the transaction, SNEPCo will hold a 67.5% stake, alongside Esso Exploration and Production Nigeria Ltd. (20%) and Nigerian Agip Exploration Ltd. (12.5%).
This targeted investment contributes towards growing Shell’s combined Integrated Gas and Upstream total production by 1% per year to 2030 and contributes towards sustaining our 1.4 million barrels per day of liquids production.
The Bonga field is a deep-water development located in OML 118, at water depths exceeding 1,000 meters. Production from Bonga began in 2005, with a capacity to produce 225,000 barrels of oil per day. The Bonga field produced its one-billionth barrel of crude oil in 2023.
Shell had in December 2024 announced a final investment decision (FID) on Bonga North, a subsea tie-back to the Bonga FPSO. Bonga North currently has an estimated recoverable resource volume of more than 300 million barrels of oil equivalent and is expected to reach peak production of 110,000 barrels of oil a day, with first oil anticipated by the end of the decade.
The estimated peak production and recoverable resources mentioned above are 100% total gross figures. The recoverable resources are currently classified as 2P (proven and probable) under the Society of Petroleum Engineers’ Petroleum Resources Management System.