Nigeria’s inability to attract deep offshore investment for nearly two decades was driven primarily by high investor risk perception rather than lack of oil resources, the President’s Special Adviser on Energy, Olu Arowolo Verheijen, has said.
In an opinion article published on Tuesday, Verheijen said the prolonged delay of Shell’s Bonga South West deepwater project exposed how fiscal uncertainty and policy instability had undermined Nigeria’s competitiveness for global capital.
Her comments followed the Federal Government’s announcement that President Bola Tinubu had approved targeted, investment-linked incentives to accelerate the long-delayed offshore project.
According to Verheijen, Nigeria’s challenge was not persuading investors of its resource potential but competing effectively for scarce, long-cycle capital in an increasingly selective global energy market.
She said Shell’s original Bonga field, which came onstream in 2005, had been one of Nigeria’s most productive offshore assets, yet its extension — Bonga South West — failed to reach final investment decision for years due to concerns over fiscal terms and regulatory predictability.
Verheijen disclosed that Shell had indicated potential additional investment of up to $20bn in the project, on top of about $7 billion already committed as a result of recent oil and gas sector reforms.
She noted that global oil companies were now sanctioning fewer deepwater projects worldwide and prioritising countries with clear rules, predictable governance, and competitive returns.
The energy adviser also linked Nigeria’s recent recovery in crude oil production — which rose to about 1.5 million barrels per day in 2025 — to improved regulatory clarity, arguing that deep offshore projects remain critical to sustaining output, foreign exchange earnings, and government revenue.
Addressing criticism of the incentives, Verheijen said they were not blanket concessions but performance-based measures tied to new investment and incremental production.
She warned that without such reforms, Nigeria risked leaving valuable offshore assets undeveloped, with no corresponding gains in jobs, revenue, or foreign exchange.
Nigeria is competing not just with other oil producers, but with other investment-ready jurisdictions. As global energy capital becomes more selective, deep offshore projects like Bonga South West could determine whether Nigeria sustains oil output, foreign exchange inflows, and fiscal stability over the next decade.
