What will it take to kick off Nigeria’s deepwater projects? Report

Insight 14 February 2020

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Report summary

We have recently delayed our estimated start-up of Nigeria's Bonga Southwest Aparo, Owowo and Preowei fields. These key deepwater projects hold up to 1.5 billion barrels of oil. But fiscal and regulatory uncertainty, global competition and field-specific challenges continue to stymie development approval. With lawmakers currently tabling another Petroleum Industry Bill, hopes are high that regulatory and fiscal uncertainty will be reduced. But we think it’s likely that further negotiations will be required for each project to set terms that will make them viable for both the government and the companies. In this report we analyse how the asset economics stack up against competing global pre-FID projects and call out what is required to get them over the line.

Executive summary
- The importance of Nigeria’s deepwater sector
- Project-specific specific challenges will demand specific solutions
Global competition sets a Major challenge
Global fiscal comparison
- Licence term renewals, new legislation, or both?
- Appendix