- SHEL.L +0.72% ENI.MI +0.56%
Shell plc (SHEL) has completed the acquisition of an additional 10% interest in Nigeria’s OML 118 Production Sharing Contract, raising its stake in the deep-water Bonga field from 55% to 65% and reinforcing its commitment to growing upstream output.
The deal, executed through Shell Nigeria Exploration and Production Company (SNEPCo), follows last year’s final investment decision on the Bonga North project and aligns with Shell’s strategy to prioritise high-return, existing assets. Bonga, Nigeria’s first deep-water oil development, has been a core pillar of Shell’s regional portfolio for two decades and remains one of the country's most strategic offshore producers.
The acquisition had initially been expected to total 12.5%, but Nigerian Agip Exploration—an Eni subsidiary—exercised pre-emption rights to acquire 2.5%, revising Shell’s incremental gain to 10%. The updated ownership structure now places SNEPCo at 65% (operator), Esso Exploration and Production Nigeria at 20%, and Agip at 15%, with all partners operating on behalf of the Nigerian National Petroleum Company (NNPC).
The move supports Shell’s target to grow combined Integrated Gas and Upstream production by around 1% annually to 2030 and helps secure the company’s stated 1.4 million barrels per day of liquids output. As Nigeria seeks to revitalize its offshore sector and stabilize crude supply, increased operator investment in mature deep-water assets is seen as a critical pathway to sustaining national production levels.
Industry observers have noted that the Bonga North expansion—expected to tap several hundred million barrels of oil equivalent—could help reverse Nigeria’s offshore decline curve, provided fiscal and regulatory stability continues to improve.
Shell’s announcement also reiterated standard cautionary statements regarding forward-looking expectations, reflecting ongoing geopolitical, market, and policy risks faced by global operators.
Overall, the higher stake signals confidence in Nigeria’s upstream potential, continued capital allocation to advantaged conventional oil, and the long-term role of deep-water assets in Shell’s portfolio strategy.
By Charles Kennedy for Oilprice.com
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