The Federal Government has approved a special production-linked tax credit for Shell Plc’s Bonga Southwest Aparo deepwater oil project in a fresh move aimed at unlocking billions of dollars in investment and accelerating Nigeria’s crude oil production.
According to a Bloomberg report on Tuesday, President Bola Tinubu approved 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 people familiar with the matter who spoke on condition of anonymity because the information is not yet public, said the incentive is expected to help move the long-delayed Bonga Southwest Aparo project towards a Final Investment Decision.
The sources also disclosed that the same production-linked tax credit would be extended to other international oil companies developing new deepwater projects in Nigeria and would remain in force until at least 2029.
The report read, “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, according to people familiar with the matter.
“Terms approved by President Bola Tinubu to push the Bonga Southwest Aparo project toward a final investment decision give Shell and its partners a rebate of $11.50 per barrel of crude produced, said the people who asked not to be identified because the information is not public. That’s more than double the standard amount.”
The development marks another step in the Federal Government’s efforts to restore investor confidence in Nigeria’s oil and gas industry after years of declining investment caused by oil theft, pipeline vandalism, insecurity, ageing infrastructure and regulatory uncertainty.
