The Nigerian government has approved a production-linked tax credit of $11.50 per barrel for Shell’s Bonga Southwest Aparo deepwater development, more than double the standard rate, in a move officials say will also be extended to other majors pursuing new deepwater projects through at least 2029. President Bola Tinubu signed off on the terms for the $20 billion project, which is expected to draw substantial foreign investment and produce 150,000 barrels of crude a day once operational, according to the Nigerian National Petroleum Company. A Shell spokesperson said the company continues to advance the project and will share updates through official channels.
The incentive extends a run of measures Tinubu has introduced by executive order since 2023 to revive a sector hobbled by crude theft, pipeline vandalism, ageing infrastructure and years of underinvestment. An earlier order capped such tax credits at 20 percent of a licensee’s annual tax bill to help offset elevated operating costs.
Shell is pushing Nigeria to formally publish the tax-credit order to strengthen its legal standing, as investors remain wary that incentives granted by executive order could be challenged or reversed by a future administration. Nigeria’s push to lock in large deepwater investments comes as global oil majors increasingly steer capital toward jurisdictions offering more predictable fiscal terms, making the durability of the current incentive framework a key test of the country’s reform drive.
Source: businessfront.com