BY SEBASTINE OBASI, Houston Texas

In an era where foreign direct investment in Nigeria’s oil and gas sector has not been forthcoming, Anglo-Dutch Shell has started contract award process for the construction of Floating Production Storage and Offloading, FPSO for its $12billion Bonga South West Aparo development.

The project, a single-point moored facility, which is expected to be the world’s biggest FPSO, has Samsung and Hyundai as bidders.
The General Manager, Shell Deepwater Nigeria, Mr. Jerry Jackson, who stated this in the official journal of the OTC 2014 in Houston Texas, said the Final Investments Decision, FID, on the field is expected to be taken before the end of 2014.

Bonga is located in oil prospecting licence, OPL 212, and Shell Nigeria Exploration and Production Company, SNEPCO, operates the field on behalf of the Nigerian National Petroleum Corporation, NNPC. The project is under a production sharing contract, PSC, in partnership with Esso (20 per cent), Nigeria Agip (12.5 per cent) and Total (12.5 per cent).

According to the OTC 2014 Journal, the oil major “already was known to be well underway with plans to develop its estimated $12 billion Bonga South West-Aparo discovery via one new build FPSO vessel, with significant Nigerian content levels.

“Considering the local content law, selection for this project, spanning OMLs 118, 132 and 140, was performed in Nigeria.
“The tender process for the single-point moored facility-which would be the World largest FPSO unit-is still currently out to tender, with bidders including Samsung and Hyundai.”

Bonga also lies 120km southwest of the Niger Delta in a water depth of over 1,000m.
Former Managing Director, SNEPCO, Mr. Chike Onyejekwe, had once said that Shell achieved tremendous success in its Bonga deep water oil field, noting that as at December 2012, it had exported about 450 million barrels of crude oil.

The cost of the Bonga field development, including the cost of the FPSO vessel built in 2004, came to $3.6billion
Despite the fact that the drilling of the 19 oil wells would amount to $12.35billion, the Bonga extension project, according to Shell, may gulp around $33billion.

It was gathered that this might include a $21billion FPSO proposed for the new Bonga South West; $4billion Bonga East; $1.9billion Bonga North (Aparo); and $3billion Bonga North East.

The NNPC had in early 2013 directed International Oil Companies, IOCs, operating in the country to drastically cut over $30bn proposed for new projects. But Shell argued that the Petroleum Industry Bill, PIB, if passed “the way it is” would drive away investment in the Nigerian oil and gas industry and might stall the 19 Bonga oil wells.

While calling for a PIB that would be “investment-friendly, it also noted that if the fiscal terms of the PIB were reviewed, about $3billion deep water revenues could be unlocked for the Federal Government.

Corroborating this, the Commercial Manager, SNEPCo, Mr. Stefan Vas de Wael, said the development of deep water assets in the country’s   oil and gas could contribute $3billion to the country’s economy as well as generate about 200,000 jobs annually.