FIVE idle deepwater oil assets are quietly draining Nigeria’s economic potential, locking away about 580,000 barrels per day of production that could boost foreign exchange (FX) earnings, government revenue and industrial activity.

These stranded projects, which include Chevron’s Zabazaba (150,000 bpd), Nsiko (100,000 bpd), ExxonMobil’s Bosi (140,000 bpd), the Satellite Field development phase (80,000 bpd), and Ude (110,000 bpd), hold proven reserves but have remained undeveloped due to high costs, regulatory uncertainty and prolonged fiscal disputes.

However, analysts say Shell’s $20 billion recommitment to the Bonga field has now emerged as a potential turning point. The investment represents the largest single foreign direct energy commitment to Africa in decades and signals renewed confidence in Nigeria’s offshore sector.

Yet Bonga is only one part of a broader deepwater challenge. Nigeria’s offshore terrain hosts dozens of discovered but stalled fields that require the same regulatory clarity and fiscal stability Shell demanded before taking its final investment decision.

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Each project represents billions of dollars in capital inflows and thousands of potential jobs. Together, they will determine whether Nigeria’s current reform push reflects systemic change or merely a relationship-driven exception.

President Bola Tinubu inherited an oil and gas sector burdened by stalled mega-projects, investor fatigue and a regulatory environment that discouraged long-term capital.

Unlike previous administrations, Tinubu moved quickly to engage directly with international oil executives, including Shell’s global CEO, Wael Sawan. Industry sources say these interactions helped reassure Shell that Nigeria’s approval processes would no longer suffocate major investments.

Group Chief Executive Officer, Nigerian National Petroleum Company Limited (NNPCL), Mr Bayo Ojulari, noted that Nigeria now competed with emerging producers like Guyana and parts of Asia for global energy capital.

Shell plans to spend up to about $20 billion on the Bonga South West deep-water development (roughly half as capital expenditure and half as operating expenditure) as part of its renewed push in Nigeria’s offshore sector. The project is tied to Shell’s increased stake in the Bonga offshore block (OML 118) and additional subsea infrastructure plans.

Impact

Many discovered offshore fields in Nigeria have sat ‘stranded’ due to regulatory, fiscal, and investment barriers. By committing significant capital to this project, Shell helps turn those undeveloped reserves into producing assets, giving real economic life to infrastructure that’s been sitting unused.

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One of the most direct ways the project will raise idle assets is by “restarting fabrication yards and service facilities that have been inactive for years,” a CEO of an oil and gas firm said.

Major fabrication yards in Lagos and Port Harcourt, which once built offshore modules and FPSO components, have been dormant due to lack of large projects. The Bonga South West project’s construction phase alone will demand significant fabrication work, keeping these yards active and creating local supply contracts, experts say.

“This isn’t just about steel but about people, equipment, and industrial capacity coming back online,” said Managing Director of SBI Consulting, a UK-based firm focusing on oil and gas sector.

At a macroeconomic level, the potential impact is substantial. Once operational, Bonga South West is expected to add up to 200,000 barrels per day to national output. This would significantly strengthen Nigeria’s production profile and improve export capacity, with direct implications for foreign exchange inflows, external reserves and fiscal stability.

For the Tinubu administration, which has prioritised market-oriented reforms, including fuel subsidy removal, exchange rate liberalisation and fiscal restructuring, Shell’s decision provides early validation that these policies are beginning to restore investor confidence, Economy Post earlier reported.

In practical terms, higher oil output supports government revenues at a time when public finances remain under pressure and infrastructure needs are expanding.

“Nigeria needs all the revenues to bolster the economy, and Shell’s investment is welcome at this time,” said Lagos-based economist, Mr Chima Nweze, who advises oil and gas firms on sustainability.

Beyond headline numbers, the investment also carries important multiplier effects. Large offshore projects stimulate demand across multiple sectors, including engineering, logistics, maritime services, fabrication, insurance and financial services. Over the project lifecycle, thousands of jobs are expected to be created, while Nigerian firms stand to benefit from procurement opportunities under local content policies.

Energy experts say the investment is also strategically significant for Nigeria’s energy security. Deepwater fields like Bonga offer long-term production stability, with lower disruption risks compared to onshore assets that have historically suffered from theft and vandalism. This improves planning certainty for both government and industry, helping Nigeria maintain consistent supply in global markets.