Nigeria eyes 2.4mn bpd oil output via deepwater expansion, Shell says

Nigeria’s oil production could rise to 2.4mn barrels per day (bpd) through deepwater exploration, but sustained policy reforms are needed to attract investment and ensure sectoral growth, Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has said.

According to Nairametrics, SNEPCo Managing Director Ronald Adams stressed the significant untapped potential of Nigeria's offshore fields at the 9th Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos. These reserves, he noted, contribute to energy security while supporting cleaner energy initiatives and global emissions reduction efforts.

“Deepwater is a compelling consideration for Nigeria if the country must meet its oil production targets and implement ambitious development programmes,” Adams is quoted as saying.

The Nigerian government has recently introduced reforms to incentivise investment in deepwater projects. Three executive orders signed in February 2024 introduced tax incentives, streamlined local content regulations, and reduced contracting costs and timelines, making new projects more attractive. Adams stressed that maintaining a favourable investment climate is crucial for long-term energy security and economic development.

UK energy supermajor Shell, a key player in Nigeria’s offshore sector, has been involved in the country’s deepwater exploration since 2005, starting with the Bonga field. In 2023, the field reached a milestone of exporting 1bn barrels of oil. The company continues its commitment to Nigeria’s energy sector with the $5bn Bonga North deepwater project, for which it made a final investment decision (FID) in December 2024.

Beyond oil extraction, SNEPCo contributes to Nigeria’s economy through tax and royalty payments, contracts awarded to indigenous businesses, and social investment programmes across the country. The company aims to enhance deepwater exploration further with innovative cost-cutting strategies to ensure quicker and more profitable returns, Nairametrics writes.