Oil giant Shell’s Bonga South West/Aparo (BSWA) deepwater project, located in Oil Mining Lease (OML) 118 in the Niger Delta, is set for development, it was learnt Tuesday.
This is coming on the heels of the output of 200,000 barrels per day from Egina field operated by Total, which began production last month.
The BSWA deepwater project, which according to the Minister of State for Petroleum, Dr. Ibe Kachikwu, will cost $10 billion with numerous value addition in-country, including job creation, skills acquisition and capacity development for Nigerians.
Kachikwu had last year directed the Nigerian National Petroleum Corporation (NNPC) and Shell Nigeria Exploration and Production Company (SNEPCo) to commence the tendering process for the execution of the project.
A top industry hinted one of our correspondents in Lagos that the stakeholders have to take the Final Investment Decision (FID) on the project and will soon announce invitation to tender for the BSWA project.
The source, which was at the stakeholders’ meeting, 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 to 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 start up.
“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.
“We are now working on details of the plan. We are expecting a very competitive cost. It will become when bids are received, they said when asked about the project cost,” the source said.
On April 17, last year, 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.
The project is expected to add 225,000 barrels per day of crude oil to Nigeria’s production.
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.