Shell in talks with Nigerian oil producers for Bonga North service contracts

Nigerian oil producers are in discussions with Shell to secure up to 25 per cent of the service contracts for the Bonga North deepwater project, the head of an industry trade group said on Tuesday.

Shell announced in December that it had agreed to invest in the project, which is expected to sustain oil and gas production at Bonga. The development will be linked to Shell’s floating production storage and offloading (FPSO) vessel, in which the company holds a 55 per cent stake.

The Nigerian government later said the project's total value stands at $5.5 billion.

Wole Ogunsanya, chairman of the Petroleum Technology Association of Nigeria (PETAN), said the group approached a local Shell delegation on Monday, along with the Nigerian agency responsible for increasing local participation in the oil industry, to discuss securing between 20 and 25 per cent of the service contracts for the multi-billion-dollar project.

“We have developed real capacity, and Nigerian companies are already operating in India, the Middle East, and other African countries. We are fully capable of handling this project as well,” Ogunsanya said at the Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) 2025, in Lagos.

Shell declined comment on the proposal.

Nigeria introduced the Local Content Development Act in 2010, requiring oil companies to submit work plans demonstrating tangible benefits to the country, including employment, resource processing, and local industry participation.

Since the law's enactment, Nigerian participation in oil and gas projects has risen to 56 per cent, with the government aiming to increase this to 70 per cent by 2027. This has aided the divestment from onshore fields by oil majors to local companies.

Shell has estimated that Bonga North holds more than 300 million barrels of oil equivalent (boe) in recoverable resources. The project is expected to reach peak production of 110,000 barrels per day (bpd), with first oil anticipated before the end of the decade.

(Reporting by Isaac Anyaogu, Editing by Franklin Paul)