Nigeria has approved special tax incentives for Shell to accelerate the final investment decision (FID) on the Bonga Southwest Aparo (BSWA) offshore oil project, a development estimated to require around $20 billion in investment.

The incentive package, approved by President Bola Ahmed Tinubu, includes a production tax credit of $11.50 per barrel, a measure aimed at improving the project’s economic viability and encouraging major international energy companies to commit new capital to Nigeria’s oil sector.

The Bonga Southwest Aparo project is one of Nigeria’s largest deepwater oil developments awaiting approval. Located offshore in the Niger Delta region, the project is expected to significantly increase crude oil production and attract billions of dollars in foreign investment.

Shell, through its local subsidiary Shell Nigeria Exploration and Production Company (SNEPCo), is leading the project alongside its partners, including the Nigerian National Petroleum Company Limited (NNPC).

The Nigerian government said the incentives are designed to unlock investment, create jobs, increase foreign exchange inflows and strengthen the country’s energy industry. Authorities emphasized that the measures are targeted specifically at new investments rather than broad tax concessions.

Nigeria has been working to revive investor confidence in its oil and gas sector after years of declining production, regulatory uncertainty and reduced investment from international oil companies.

President Tinubu’s administration has introduced reforms aimed at making the energy sector more attractive, including improving fiscal conditions for deep offshore projects and streamlining investment processes.

The Bonga Southwest Aparo project comes at a critical time for Nigeria, Africa’s largest oil producer, as the country seeks to boost crude output while diversifying its economy. The government views the oil sector as a key source of foreign exchange and public revenue, even as it promotes growth in agriculture, technology and manufacturing.

For Shell, the project represents a major long-term investment in deepwater production, a sector where Nigeria has significant reserves but has struggled to attract sufficient capital in recent years.

If approved, the project could become one of the largest private-sector investments in Nigeria’s energy industry, reinforcing the country’s position as a major oil and gas hub in Africa.