Shell has deferred expansion work at its Nigerian offshore Bonga field by two years.
S&P Global Platts, which provides benchmark prices for commodity markets around the world, reported this on Wednesday, quoting company sources.
Bonga, Nigeria’s first deep-water oilfield, can produce 225,000 barrels of crude oil and 150 million standard cubic feet of gas per day.
Shell along with its partners had in May 2021 signed a contract with the state oil company Nigerian National Petroleum Company Limited (NNPC) on oil mining lease OML 118 to expand the Bonga oilfield and unlock a $10 billion investment in the country’s deep-water resources.
Earlier, Shell had said it would execute the Bonga Southwest project, whose total potential yield comes to 3.2 billion barrels.
According to the report, the development had previously been delayed due to a long-standing tax dispute.
It noted that Shell had gone ahead, after the rift was resolved, to welcome bids from international contractors to build a new 150,000 barrels per day floating production storage and offloading (FPSO) platform for Bonga Southwest.
“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,” a senior NNPC official told S&P Global Platts.
A frontman for the Shell Petroleum Development Company Nigeria, according to the research house, confirmed that the contract award for the construction of the 150,000 barrels per day Bonga Southwest FPSO had been put on hold.
“The Bonga Southwest has been deferred,” he said, declining to offer further details.
The NNPC and Shell sources said the delay could be related to a change in Shell’s upstream strategy as part of its net-zero ambitions.
Developing Bonga Southwest could up Nigeria’s oil reserves by one billion barrels.
“Output from the field was one of the projects Nigeria was banking on to raise production to around 3 million barrels per day by 2023,” NNPC officials told S&P Global Platts.