Royal Dutch/Shell Group is planning new investments in deep water frontier in a bod to enhance deep water operations in the country.
In a media chat in Lagos, Igo Weli, country head corporate relations and director, Shell Petroleum Development Company, SPDC, said despite global concern and western nation’s incertitude to fund fossil fuel development, the oil giant is creating new opportunities in deep water frontier.
Weli, said though the company is investing in green energy space, fossil fuel will still be relevant in global economic development and as such Shell will not abandon its producing assets and will also focus on new field development.
Shell early in the year put some assets on sale which reportedly attracted five indigenous oil and gas companies.
The firms said to be eyeing the assets valued at about $3 billion are Seplat Energy, Sahara Group, Famfa Oil, Troilus Investments Limited, and Nigeria Delta Exploration and Production (NDEP).
Shell has stakes in 19 oil Mining Leases in the country’s onshore oil and gas joint venture. Shell Petroleum Development Company (SPDC) controls a 30 per cent stake in the venture; the Nigerian National Petroleum Company Limited (NNPCL), 55 per cent; TotalEnergies 10 per cent and ENI five per cent.
Weli, said one third of Nigeria’s deep water production comes from the Bonga and Erha fields.
Shell Nigeria Exploration and Production Company, SNEPCo, pioneered deep water oil and has production from the Bonga field in the Gulf of Guinea where depths reach more than 1,000 meters.
Since production began in 2005, Bonga alone has produced more than 900 million barrels of oil.
Though Weli, confirmed reported delay in the expansion work at its Nigerian offshore Bonga field by another two years, which has dealt a major blow to Nigeria’s quest to grow its crude production after a series of technical and operational setbacks, he said efforts are ongoing to return to the field.
It was only in May 2021 that Shell, along with its partners, signed a deal with the Nigerian National Petroleum Company Ltd (NNPC) in the deepwater oil block Oil Mining Lease 118, clearing the path to a major expansion of the country’s Bonga oil and gas field.
The development had previously been shelved due to a long-standing tax dispute with Shell, the operator of the field.
After the dispute was resolved, Shell once again invited bids for the construction of new floating production storage and offloading (FPSO) unit for its Bonga Southwest deepwater oil field in Nigeria.
However, the response to the tender had been underwhelming.
There has been a delay in progressing with the tendering process for the Bonga Southwest field. The tenders have been put on hold till around 2024.
The contract award for the construction of the 150,000 b/d Bonga Southwest FPSO had been put on hold.
The delays could be related to a change in Shell’s upstream strategy as part of its net zero ambitions, though Weli maintained that the company is looking some economic variable to restart the field development.
Shell is Nigeria’s biggest oil producer, but relations have soured in recent years due to commercial and security issues.
Weli, said insecurity and third party breach of assets is affecting the company’s operations.
