President Bola Ahmed Tinubu has approved a targeted fiscal incentive package aimed at unlocking the long-delayed Bonga Southwest Aparo Project, a development expected to attract about $20bn in foreign direct investment into Nigeria’s oil and gas sector.

The approval was announced on Tuesday by the Nigerian National Petroleum Company Limited (NNPC Ltd.), which said the decision could pave the way for the long-awaited Final Investment Decision (FID) on the offshore project that has remained stalled for nearly two decades.

The project is operated by Shell Nigeria Exploration and Production Company, a subsidiary of Shell plc, in partnership with other international oil companies and the national oil firm.

According to NNPC, the presidential approval followed months of negotiations involving key stakeholders, including the Federal Inland Revenue Service, the Special Adviser to the President on Energy, Olu Verheijen, and the Chief Executive Officer of Shell plc, Wael Sawan.

In a statement signed by the Chief Corporate Communications Officer of NNPC Ltd., Andy Odeh, the company described the move as a significant step toward restoring investor confidence in Nigeria’s deepwater petroleum assets.

The fiscal framework approved by the president includes an enhanced production tax credit and the resolution of the 2021 dispute settlement agreement, measures aimed at creating a competitive investment environment while safeguarding Nigeria’s long-term revenue interests.

Reacting to the development, the Group Chief Executive Officer of NNPC Ltd., Bayo Ojulari, said the approval marked a turning point for the project which had remained stalled for almost 20 years.

“This approval is a testament to the President’s leadership, NNPC’s disciplined execution and our ability to structure complex, bankable transactions that deliver value for Nigeria,” Ojulari said.

He added that under the current administration’s reform-driven policies, the long-standing bottleneck around the project had been resolved through sustained advocacy and collaboration among stakeholders.

According to NNPC, the Bonga Southwest Aparo project will become Nigeria’s first Final Investment Decision on a deepwater Production Sharing Contract asset since 2008, potentially signalling renewed investor confidence in offshore exploration.

Once operational, the project is expected to produce about 150,000 barrels of crude oil per day and 140 million standard cubic feet of gas daily, significantly boosting Nigeria’s hydrocarbon output.

The project is also projected to generate more than 5,000 direct and indirect jobs across the oil and gas value chain.

The initiative forms part of the Federal Government’s broader strategy to attract more than $100bn in investments into Nigeria’s energy sector by 2030, particularly in deepwater exploration, gas development and energy infrastructure.

Nigeria’s deepwater basins have historically been among the most productive in Africa, with fields such as the Bonga Oil Field, Erha Oil Field and Agbami Oil Field contributing significantly to the country’s oil production.

However, new offshore project sanctions have slowed in recent years due to regulatory delays, rising development costs and shifting global investment priorities within the energy industry.