Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has urged Nigerian companies to urgently position themselves to take advantage of a growing wave of opportunities in the country’s offshore and shallow water oil and gas projects.

With massive deepwater projects such as Bonga Southwest Aparo, Bonga North, and the Bonga Main Life Extension on the horizon, SNEPCo says the time has come for indigenous firms to expand their capacity and move up the value chain — or risk being left behind.

The call was made by Ronald Adams, Managing Director of SNEPCo, while addressing stakeholders at the 5th Nigerian Oil and Gas Opportunity Fair (NOGOF), held Thursday in Yenagoa, Bayelsa State.

“Projects like Bonga Southwest Aparo, Bonga North, and Bonga Main Life Extension are not just investments in oil production — they are investments in Nigeria’s industrial future,” Adams said. “Nigerian companies must demonstrate that they are ready, not just in ambition but in technical depth and delivery capability.”

At the heart of Adams’ message is billions of dollars of Nigeria’s deepwater. Nigeria’s oil industry, long battered by pipeline sabotage, underinvestment, and policy inconsistency, is slowly clawing its way back, and the deepwater sector is leading that resurgence.

The $5 billion Bonga North project, a major expansion of the iconic Bonga field, reached the Final Investment Decision (FID) in 2025, giving it the green light to proceed into full development. Together with Bonga Southwest Aparo and the Life Extension project on Bonga Main, these projects are expected to inject significant capital into Nigeria’s oil sector, boost daily production, and create thousands of direct and indirect jobs.

Adams noted that if local companies can rise to the challenge, they stand to benefit immensely not just in revenue but also in technological advancement and international credibility.

He pointed to key service areas such as subsea systems fabrication, gas processing infrastructure, drilling support, FPSO maintenance, and mooring systems as avenues where Nigerian firms can expand their role — if they invest in the required competence and infrastructure.

SNEPCo’s optimism is grounded in what it sees as a proven track record. Since launching Nigeria’s first deepwater oil project in 2005 with the original Bonga field, SNEPCo has worked closely with Nigerian firms to build local capacity — from engineering design to fabrication and project execution.

According to Adams, this partnership has paid off. The Bonga Floating, Production, Storage, and Offloading (FPSO) vessel — a massive floating facility central to Shell’s operations — reached a historic milestone in February 2023 when it produced its one-billionth barrel of oil. Crucially, Nigerian companies played key roles in managing and maintaining this facility.

However, there is still a large gap to fill. Despite years of local content promotion, Nigerian companies continue to struggle to break into high-value segments of offshore oil operations, which are still dominated by international contractors. Industry insiders say this is due to both technical limitations and a lack of financial muscle.

A Regional Opportunity Beyond Nigeria

It’s not just Nigeria that’s on the cusp of a deepwater renaissance. According to a recent report, Nigeria, Ivory Coast, and Mozambique are projected to launch at least 10 offshore oil projects between 2026 and 2027. This broader regional boom offers even more incentive for Nigerian firms to build exportable skills and compete beyond the local market.

Shell sees Nigeria as a potential hub for deepwater oil services in West Africa — but only if its companies act fast.

It is believed that if Nigerian companies can meet the standards required, they won’t just execute Nigerian projects — they’ll be eligible to participate in projects across the continent.

Structural Gaps and Policy Challenges

Nigeria’s offshore oil development is often delayed by regulatory uncertainty, contract disputes, and lengthy approval timelines. Although the enactment of the Petroleum Industry Act (PIA) in 2021 was meant to bring clarity, its implementation has been uneven, creating investor anxiety.

Local contractors also face barriers related to financing, insurance, and equipment procurement — problems that international players are better positioned to navigate.

Several Nigerian oil executives at the event quietly expressed concern that unless government agencies fast-track project approvals and reduce bureaucratic red tape, the opportunity being highlighted may once again be squandered.

A Bigger Vision of Raising National Output

Shell’s renewed emphasis on local participation is also tied to a broader national goal. In February 2025, SNEPCo projected that Nigeria could exceed 2.4 million barrels per day in oil production — but only if deepwater investments are fast-tracked and local capacity is scaled up to match project needs.

With most onshore and shallow water fields declining or compromised by theft and vandalism, offshore fields are now seen as Nigeria’s best shot at reversing years of production decline and revenue shortfalls.

The Nigerian government appears to agree. The Nigerian Content Development and Monitoring Board (NCDMB), which organized NOGOF, has repeatedly stressed that deepwater expansion must be accompanied by deeper local involvement, warning that outsourcing key contracts to foreign firms would amount to another missed opportunity.

The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced that the Port Harcourt Refining Company (PHRC) will undergo yet another shutdown — this time for “scheduled maintenance and sustainability assessment” starting May 24, 2025.

In a statement released Saturday by Chief Corporate Communications Officer, Femi Soneye, the NNPC explained the shutdown as part of its broader plan to ensure long-term reliability of the facility.

“We are working closely with all relevant stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to ensure the maintenance and assessment activities are carried out efficiently and transparently,” the statement read.

“NNPC Ltd remains steadfast in its commitment to delivering sustainable energy security.”

However, the phrase “sustainable energy security” is beginning to ring hollow for Nigerians who have seen years of similar pledges lead to dead ends.

A Refinery That Produces No Fuel

The Port Harcourt refinery — comprising the older 60,000 bpd and newer 150,000 bpd units — was supposed to be a crown jewel in Nigeria’s bid to revive local refining. In August 2021, the Federal Executive Council approved a sweeping rehabilitation plan across four government-owned refineries: Port Harcourt (210,000 bpd), Warri (125,000 bpd), and Kaduna (110,000 bpd), giving a combined nameplate capacity of 445,000 barrels per day — the basis for the crude intervention stock allocated to the NNPC.

The cost was staggering:

• $1.48 billion for Port Harcourt
• $897.7 million for Warri
• $586.9 million for Kaduna

That’s a total of nearly $3 billion, in a country plagued by budget deficits, currency instability, and widespread poverty. Because the federal government couldn’t cough up the full sum at once, it granted the NNPC leeway, just nine days before the Petroleum Industry Act (PIA) was signed into law on August 21, 2021, to source funds externally.

NNPC structured a series of forward-sale agreements, pledging Nigeria’s future crude oil output in exchange for immediate cash from multilateral development banks and oil trading companies. These traders were granted preferential creditor status — meaning repayment was prioritized, regardless of Nigeria’s domestic needs.

“$1.04 billion came from a multilateral development bank, while $450 million came from a trader that has been collecting 67,000 barrels per day as repayment for a few years,” energy expert Kelvin Emmanuel said.

“The crude that should have been sold to earn FX for stabilizing the naira and funding the budget deficit has been swept down the drain. And the EFCC is quiet — but when it’s yahoo boys, you’ll see their erection.”

The NNPC has never denied these arrangements. The company once described the forward sale as a creative financing model. But nearly four years later, the refinery is still yet to produce any refined fuel for the Nigerian market — only official statements, ribbon-cutting ceremonies, and now, recurring shutdowns.

A Pattern of Dysfunction and Secrecy

The PHRC reportedly resumed operations briefly in late 2024 after years of inactivity, a milestone celebrated by government officials who framed it as a turning point for local refining. But just weeks later, in December, the refinery was again shut down — quietly. No official reason was provided at the time, and the public was left to guess whether the plant had ever truly come online.

Now, with this new shutdown announced as “planned maintenance,” analysts are questioning the logic of spending billions on a facility that has yet to show functional output. The opacity surrounding the true status of the refinery’s performance only deepens suspicions.

Despite the enormous cost of refinery rehabilitation, Nigeria still relies largely on imported fuel. This continues to drain foreign reserves and deepen inflationary pressures, with petrol prices frequently adjusted upward since the removal of the fuel subsidy in 2023.

While NNPC insists that the latest shutdown is routine, the optics are damning. The refinery’s inability to produce despite billions of dollars pumped into rehabilitation has sparked criticism, with many believing that it’s just another plot to embezzle public funds.

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