By Otobong Gabriel, Abuja
Nigeria has approved new fiscal incentives to support Shell’s Bonga South West offshore oil project, signalling renewed efforts to revitalise investment in the oil and gas sector.
The project is expected to increase crude oil output and help stabilise government revenue at a time when competition for global energy investment is intense.
In recent years, Nigeria’s oil production has faced challenges from underinvestment, regulatory uncertainty and operational disruptions. The approval of incentives for the Bonga South West project is part of broader reforms aimed at restoring investor confidence and ensuring the long-term viability of the sector.
Offshore oil projects are considered strategically important because they are less vulnerable to security challenges that affect onshore operations. Industry experts note that increased offshore production could help Nigeria maintain output levels while broader energy transition plans are gradually implemented.
Government officials maintain that while renewable energy development remains a long-term goal, oil and gas revenue is still critical for funding infrastructure, education, healthcare and social programmes.
The incentives granted to Shell are designed to make deep-water projects commercially viable amid rising global costs and shifting energy markets.
Analysts believe the project could create employment opportunities, boost local content participation and enhance foreign exchange inflows. If successfully executed, the Bonga South West project may serve as a model for future offshore investments, supporting Nigeria’s economic recovery while balancing development and sustainability goals.
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