₦airaland Forum

The Federal Government has approved a special production-linked tax credit for Shell Plc's Bonga Southwest Aparo deepwater oil project, in a move aimed at unlocking an estimated $20 billion in investment and accelerating Nigeria's crude oil production.

According to a Bloomberg report published on Tuesday, President Bola Tinubu approved new fiscal terms granting Shell and its partners a tax rebate of $11.50 for every barrel of crude oil produced from the project, more than double the standard incentive currently available under Nigeria's fiscal framework.

The report, citing sources familiar with the matter, said the enhanced tax credit is expected to help move the long-delayed Bonga Southwest Aparo project towards a Final Investment Decision (FID).

The sources also disclosed that the same production-linked tax incentive would be extended to other international oil companies developing new deepwater projects in Nigeria and would remain in effect until at least 2029.

According to the report:

"Nigeria granted Shell Plc a production-linked tax credit for a deepwater project, an incentive that will be offered to other oil majors as Africa's biggest producer seeks to boost production."

Project expected to attract $20bn

The Bonga Southwest Aparo project is one of Nigeria's largest undeveloped deepwater oil fields and is projected to attract approximately $20 billion in foreign direct investment.

According to the Nigerian National Petroleum Company Limited (NNPCL), the project is expected to produce about 150,000 barrels of crude oil per day when operations commence, significantly increasing Nigeria's oil production capacity.

Responding to enquiries, a Shell spokesperson confirmed that work on the project is progressing.

"Shell continues to progress the Bonga Southwest Aparo project toward development and will communicate material updates through official channels," the spokesperson said.

Officials of the NNPCL and the Office of the President's Special Adviser on Energy did not comment on the development.

Part of broader oil sector reforms

The latest incentive forms part of the Tinubu administration's ongoing reforms to revive Nigeria's petroleum industry, which has suffered years of declining investment due to crude oil theft, pipeline vandalism, insecurity, ageing infrastructure and regulatory uncertainty.

Since assuming office in May 2023, the Federal Government has introduced several executive orders aimed at improving Nigeria's competitiveness, attracting fresh investment and unlocking stalled oil and gas projects.

An earlier executive order limited production tax credits to 20 per cent of a licence holder's annual tax liability to offset operating costs.

Industry stakeholders believe the enhanced tax credit will improve the commercial viability of deepwater projects, where production costs are considerably higher than those of onshore operations.

Nigeria's oil production rises

The development comes as Nigeria records steady improvements in crude oil production.

Figures recently released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that the country's crude oil production rose to an average of 1.56 million barrels per day in June 2026, the highest monthly output since April 2020.

The increase has been attributed to improved security around oil infrastructure, renewed upstream investments and ongoing government reforms.

Investors seek legal certainty

Despite the new incentives, concerns remain over the long-term stability of executive orders, which can be amended or challenged by future administrations.

According to the Bloomberg report, Shell has requested that the Federal Government publish the tax-credit order in the Official Gazette to strengthen its legal standing and provide greater certainty for investors.

Government documents reportedly indicate that the gazetting process has already commenced.

Helinuse:
This is crime in the open

Helinuse:
This is crime in the open

nairalanda1:
It's kind of something countries do...Shell produces the oil , and in return they get tax reliefs...which would mean extra money which gets invested (in theory) in more production activites, which increases our crude oil production.

The downside is...more crude means lower oil prices. And thus lower government income, but hopefully on the upside it means domestic crude production increases, which means Dangy boy and BUA (when he is ready) and all the other refinery gents can now buy more crude at home, keeping more forex at home, and relieving pressure on the nayra by a bit (A BIT, mind.).

Every country does something similar. South Korea essentially gave the chaebols generous tax benefits in return for improved industrial production. While many south koreans don't really like that idea and some regard it as daylight robbery...it's a big reason why you can use a Samsung phone and drive a hyundai, and buy a hankook battery for your car.

Helinuse:
This is a crime in the open:

"According to a Bloomberg report published on Tuesday, President Bola Tinubu approved new fiscal terms granting Shell and its partners a tax rebate of $11.50 for every barrel of crude oil produced from the project, more than double the standard incentive currently available under Nigeria's fiscal framework."


As Nigerian youths are busy throwing slogans like "school na scam" around and arguing that "education is not school and school is not important,"
Their leaders are busy building a very massive corruption stream for themselves under very subtle frameworks that the unlearned cannot understand.
So schemes like these have to be uncovered by a Bloomberg, not a Nigerian outfit, because we don't have the brains to sit and study.

simpleseyi:
.
This one is an educated illiterate. Incentives as traps to make you do what you don’t want to do.

9jatriot:
Is the Lord not good?

Thank God for BAT.

He is always thinking long term development.

If it were that lamba king that was in power, the kind of discussions we would be having would be irrelevant things like: 'Aso rock kitchen wanted to give me rice with chicken, I told them to start using crayfish from now on to save cost', then his moob would have been telling us that we are making progress.

God forbid bad thing

Helinuse:
This is a crime in the open:

"According to a Bloomberg report published on Tuesday, President Bola Tinubu approved new fiscal terms granting Shell and its partners a tax rebate of $11.50 for every barrel of crude oil produced from the project, more than double the standard incentive currently available under Nigeria's fiscal framework."


As Nigerian youths are busy throwing slogans like "school na scam" around and arguing that "education is not school and school is not important," their leaders are busy building a very massive corruption stream for themselves under very subtle frameworks that the uneducated cannot understand. So schemes like these have to be uncovered by a Bloomberg, not a Nigerian outfit, because we don't have the brains to sit and study.



Just as I finished typing my full comments, I knew some APC N30k WhatsApp group members would rush out to say it is just "an incentive to create jobs," etc. They are the same people who surely didn't bother reading. Nigerians don't like reading. .

Imagine a person stealing $5 per barrel for the whole life of a project (development, operation, and decommissioning). Now, for it to be twice beyond the threshold, it simply means that half of that amount is surely not going to the developers. Then who are they going to?.

nairalanda1:
[b]It's kind of something countries do...[/b]Shell produces the oil , and in return they get tax reliefs...which would mean extra money which gets invested (in theory) in more production activites, which increases our crude oil production.

The downside is...more crude means lower oil prices. And thus lower government income, but hopefully on the upside it means domestic crude production increases, which means Dangy boy and BUA (when he is ready) and all the other refinery gents can now buy more crude at home, keeping more forex at home, and relieving pressure on the nayra by a bit (A BIT, mind.).

Every country does something similar. South Korea essentially gave the chaebols generous tax benefits in return for improved industrial production. While many south koreans don't really like that idea and some regard it as daylight robbery...it's a big reason why you can use a Samsung phone and drive a hyundai, and buy a hankook battery for your car.

The government did say in 2023 that they wanted to increase crude production to 4 million bpd, and they have one year to the deadline they set themselves. Somehow, this is one of the ways forward.

Life's not fair, but here we are. People, inlcuding you , would not do anything without being paid money. Shell's got the expertise. Doubt there is any Nigerian company with their level of expertise for the job.

Frezhkid10:
Omo we really saved Nigeria during the 2023 elections..chai imagine he was the president..we would have saved billions in foreign reserve with zero job creation..

nairalanda1:
It's kind of something countries do...Shell produces the oil , and in return they get tax reliefs...which would mean extra money which gets invested (in theory) in more production activites, which increases our crude oil production.

The downside is...more crude means lower oil prices. And thus lower government income, but hopefully on the upside it means domestic crude production increases, which means Dangy boy and BUA (when he is ready) and all the other refinery gents can now buy more crude at home, keeping more forex at home, and relieving pressure on the nayra by a bit (A BIT, mind.).

Every country does something similar. South Korea essentially gave the chaebols generous tax benefits in return for improved industrial production. While many south koreans don't really like that idea and some regard it as daylight robbery...it's a big reason why you can use a Samsung phone and drive a hyundai, and buy a hankook battery for your car.

The government did say in 2023 that they wanted to increase crude production to 4 million bpd, and they have one year to the deadline they set themselves. Somehow, this is one of the ways forward.

Life's not fair, but here we are. People, inlcuding you , would not do anything without being paid money. Shell's got the expertise. Doubt there is any Nigerian company with their level of expertise for the job.

PDPdestroyer:
Stop commenting on topics you know absolutely nothing about

CodeTemplarr:
Never disappointed in you support for APC demons.

9jatriot:
He still would not have saved anything significant. Obiano said he did not meet any saved money waiting for him, instead what he got to know later was that the sneak had given contractors post dated cheques to go and cash out immediately he leaves office.

Anyway, let us not digress from this great news.

Dennisochampa:
Mr educated man.. Please break it down for the average Nigerian to understand why it's a wrong move....

Don't tell us what they said.. Like u said. They are not Nigerian and when they speak we don't understand... U that is educated and a Nigerian.. Break it down for the common man to understand.... Tell us in details... Why it's a bad move and what is the better alternative because what I saw was that the government made a trade here... To unlock the 20b dollar investment.. So please tell us why it's a bad move and also help us understand what we could have done to also unlock that 20b dollar investment

Helinuse:
You mean EVERY COUNTRY does more than double the standard incentive currently available under Nigeria's fiscal framework.
I guess you didn't even read the write-up.
You all just want to rush back to the WhatsApp group to post, "I have defended this on Nairaland, please forward my July payment."

That's why you called it "kind of something..."

Irony1:
So Alex Otti that confirmed the savings is lying is that what you want to say?

9jatriot:
Is the Lord not good?
Thank God for BAT.

He is always thinking long term development.

If it were that lamba king that was in power, the kind of discussions we would be having would be irrelevant things like: 'Aso rock kitchen wanted to give me rice with chicken, I told them to start using crayfish from now on to save cost', then his moob would have been telling us that we are making progress.
God forbid bad thing

"I know of States that have received over 500 billion Naira from the Federal Government as palliative, but I have never received anything.

I think the reason I don't get it is because I'm not in APC.

-Dauda Lawal, Zamfara State Governor pic.twitter.com/QvfR8olibA

— Arewa Source (@Arewa_Source) February 17, 2026

NaijaRoyalty:
…Says Buhari doesn’t have my kind of money

However, Buhari doesn’t have the kind of money I can steal neither does he have the money I can collect. He doesn’t even have the money for Lagos votes. So, whatever I promise, it’s for real and is coming from my pocket. It’s not until I go to Alausa before I get money to give you.”

Addressing APC supporters on the need to deliver votes, Tinubu said handsome cash rewards await those who can deliver votes for the party.

He said he would not make mistakes of the past where people would collect money in advance and not deliver on election day.

Tinubu added, “Those of you that say you come to Bourdillon for mobilisation, it is mobilisation that we are doing here or don’t you understand? Definitely, if you know people in your neighbourhood, our members, how we used to do.

https://punchng.com/i-said-i-was-richer-than-osun-state-tinubu-admits/

On January 13th 2023, @officialABAT outlined this specific deal at the @officialNESG Dialogue With Presidential Candidates On The Nigerian Economy.

He clearly said...

1 - "I am prepared to give up a little of the revenue if I can get the investment back. If I can get the oil… https://t.co/ZdttFxTmc6 pic.twitter.com/GyARgiebwr

— F O L U🚀 (@FolushoxFolarin) July 15, 2026

On January 13th 2023, @officialABAT outlined this specific deal at the @officialNESG Dialogue With Presidential Candidates On The Nigerian Economy.

He clearly said...

1 - "I am prepared to give up a little of the revenue if I can get the investment back. If I can get the oil companies back into production, the volume will compensate for the lower take."

2 - "Strike early deals with oil companies, reverse the massive divestment underway and agree on improved fiscal regimes"

Several international oil companies were divesting from their onshore Nigerian assets due to insecurity, oil theft, regulatory uncertainty, and concerns about the fiscal regime.

-Insecurity? Since President Tinubu took office, the International Maritime Bureau (IMB) has confirmed that Nigeria is no longer a global hotspot for piracy.

-Oil theft? Nigeria has the Deep Blue Project, which includes patrol vessels, aircraft, drones, and surveillance systems to monitor the country's territorial waters and deter crude oil theft. The military's Operation Delta Sanity is also focused on eliminating oil theft. Plus, there's Oga Tompolo's Tantita Security Services. 😉

-Fiscal regime? We all know what Yemi Cardoso has done in that regard. The Naira has stabilized, foreign exchange reserves are stronger, BDCs have been sanitized, and the landmark FX rate unification has improved market confidence.

So, when @Shell Global CEO Wael Sawan says they are back in Nigeria & willing invest $20 billion in Nigeria's deep-water oil projects and natural gas developments...

It's not a gamble. It's not luck. It's precise policy engineering and execution which @Shell saw and took action.

Someone, somewhere fulfilled his campaign promise and did the work to address the issues that had made Nigeria less attractive to investors.

That person is Bola Ahmed Tinubu.

iwaeda:
Let me laugh ahead. $11.50 per barrel. How much will remain for the country. People should see ahead. It is well with all those supporting this wicked leaders.This is not a new project, it has already been announced since January, but some propaganda machine will make you belive it was signed yesterday.

9jatriot:
Is the Lord not good?

Thank God for BAT.

He is always thinking long term development.

If it were that lamba king that was in power, the kind of discussions we would be having would be irrelevant things like: 'Aso rock kitchen wanted to give me rice with chicken, I told them to start using crayfish from now on to save cost', then his moob would have been telling us that we are making progress.

God forbid bad thing