Oilfield services giant Saipem has been awarded a $900 million contract for a deepwater oil and gas project off Nigeria’s coast.
Under the agreement with Shell Nigeria Exploration and Production Company Limited (SNEPCo), Saipem, along with two other indigenous companies, will manage the Engineering, Procurement, Construction and Installation (EPCI) of risers, flowlines, subsea umbilicals, and related subsea structures for the Bonga North Project, situated 130 kilometres offshore Nigeria.
The design and fabrication processes will be done locally, and Nigerian suppliers and subcontractors will be engaged. The contract was awarded to a consortium that includes KOA Oil & Gas and AVEON Offshore, with a total value of about $1 billion, while Saipem’s portion is roughly $900 million.
With water depths surpassing 1,000 meters, Bonga North will be connected to the Shell-operated FPSO Bonga, where production commenced in 2005. The FPSO, capable of producing 225,000 barrels of oil per day, achieved a significant milestone in 2023 with its one-billionth barrel of crude oil.
Shell stated that the project involves drilling, completing, and starting up 16 wells, with half designated for production and the other half for water injection, along with modifications to the existing FPSO Bonga Main and installing new subsea hardware connected to the unit. Akselos provided a structural digital twin for this unit back in 2020.
Shell’s investment in the Bonga North project is anticipated to yield an Internal Rate of Return (IRR) that surpasses the benchmark for the company’s upstream operation, and it is optimistic that Bonga North will contribute to ensuring its integrated gas and upstream operations continue producing cash well into the next decade.
The peak production of the Bonga North project is expected to reach 110,000 barrels of oil per day, with the initial oil production projected by the end of the decade, according to the company.
