Worker monitoring Bonga Floating Production Storage and Offloading vessel, Gulf of Guinea

Shell has a long history of successfully developing deep-water energy projects worldwide. We continue to use our knowledge, experience and proven deep-water technologies to unlock new resources safely and efficiently. We work to limit the impact of our operations on the environment and share the resulting benefits with society.

In the past decade, industry-wide production from deep-water fields have added more than 800,000 barrels per day to Nigeria's total oil output, which currently stands at around 2.1 million barrels per day. The Federal Government of Nigeria via its short and medium-term priorities aimed at the development of Nigeria’s oil and gas sector, termed the ‘7 Big Wins’, has set ambitious targets to increase total oil production in the next few years with a plan to significantly increase deep water exploration and production.

Shell Nigeria Exploration and Production Company Limited (SNEPCo)

Shell Nigeria Exploration and Production Company Limited (SNEPCo) was established in 1993 and carries out Shell Companies in Nigeria’s offshore activities. The company draws on Shell’s global deep-water expertise as well as that of its Nigerian engineers and technicians to deliver safe, world class and economically viable projects that provide jobs and training for Nigerians. Over the last two decades, SNEPCo’s exploration activities have resulted in the discovery of several significant oil and gas resources, including the Bonga, Bolia, Zabazaba and Doro fields.

Bonga Field

The Bonga field in OML-118, which started production in 2005, is located 120 km offshore in the Gulf of Guinea. It is Nigeria’s first oil and gas production project in more than 1,000 metres of water. SNEPCo operates Bonga in partnership with Esso Exploration and Production Nigeria (Deepwater) Limited, Total E&P Nigeria Limited and Nigerian Agip Exploration Limited under a Production Sharing Contract with the Nigerian National Petroleum Corporation.

For the project SNEPCo built one of the world’s largest floating production, storage and offloading (FPSO) vessels. Three hundred metres long and the equivalent height of a 12-storey building, the FPSO’s deck spans an area as large as three football fields.

The Bonga FPSO receives crude and gas from production wells on the seabed and has the capacity to produce 225,000 barrels of oil and 210 million standard cubic feet of gas per day. It increased Nigeria’s oil production capacity by 10% when it began producing in 2005. By the end of 2017, Bonga had produced about 763 million barrels of oil cumulatively.

In 2017, Bonga operated at more than 83% availability and was therefore a stable source of revenue for the Federal Government of Nigeria throughout the year. Availability was lower in 2017 than in 2016 due to a major turnaround maintenance in March and April. Bonga will continue to strive for over 90% availability, which will place the asset among industry’s top performers.

The FPSO vessel’s capacity has been upgraded in recent years, allowing SNEPCo to expand the field with further drilling of wells in Bonga Phases 2 and 3 and through a subsea tie-back that unlocked the nearby Bonga North West field in August 2014. Bonga North West is capable of producing approximately 65,000 barrels of oil equivalent a day.

Bonga Phase 3 achieved first oil in October 2015. Oil and gas are transported by an undersea pipeline to the nearby Bonga FPSO, which SNEPCo upgraded to handle the additional flow from Bonga North West wells. Once separated from the gas, oil is sent to a Single Point Mooring (SPM) buoy anchored nearby used to load oil tankers for export around the world. The gas is piped to the Nigeria Liquefied Natural Gas (NLNG) plant at Bonny Island, where it is cooled to produce liquefied natural gas for shipping to international consumers.

The Bonga North West deep-water development was named Engineering Project of the Year 2015 at the prestigious Platts Global Energy Awards in New York. This represents an important achievement for Nigeria’s deep- water industry.

In recent years, SNEPCo has undertaken several projects to further maximise the performance of the Bonga FPSO, for example, optimising FPSO production at peak levels for longer periods of time through early planning and effective scheduling of rigs.

Global Expertise, Local Workforce

With thousands of people working on deep water projects across the world, Shell works to ensure that the knowledge gained from one project is transferred to others. By leveraging international experience, SNEPCo helped create the first generation of Nigerian deep-water oil and gas engineers.

The Bonga North West field not only unlocked new energy resources in Nigeria, it also opened new skills that strengthened the country’s engineering and technical education capabilities. The project was completed in 2014 with over 4 million-man hours of work and no time lost to injury. It was the first project to be executed under the Nigerian Oil and Gas Industry Content Development Act and supported the establishment in 2010 of a local fabrication yard for subsea components, a pipe coating plant and a welding laboratory in Nigeria.

In 2015, five subsea trees were refurbished at a fabrication yard at Onne in Rivers State, the first in Sub-Saharan Africa with Nigerian engineers and technicians playing key roles. A subsea tree is an arrangement of valves and other components installed at the wellhead to control and monitor production flow and manage fluids injection. The refurbishment of the subsea trees has helped to increase oil production in the Bonga field and in 2017 the achievement earned Shell Companies in Nigeria the Best Performing International Company in Technology and Innovation at the Nigeria International Petroleum Summit in Abuja.

Since 2005 when production started at Bonga, the Managing Director of SNEPCo has been Nigerian and today, 96% of SNEPCo’s staff is Nigerian, with significant levels of Nigerian staff trained or going on temporary assignments overseas, further increasing local capacity for the future. SNEPCo has also provided specialised training for semi-skilled Nigerians to work in the energy industry, for example as welders and scaffolders.

Bonga also stimulated the growth of support industries vital to deep-water projects. These benefit the wider Nigerian economy by boosting demand for a range of goods and services including offshore vessels and platforms, materials, floating hotels, helicopters and manpower, creating jobs and providing a range of training and maintenance services to the industry locally.

As operator of Bonga, SNEPCo pioneered the use of deep-water technology in Nigeria. For example, in collaboration with a local contractor, SNEPCo successfully completed intelligent pigging between 2013-2016 that inspected the integrity of 190 km of production flowlines in over 1000 metres of water depth. Bonga also boasts the first, largest and most technologically advanced polyester moored deep-water buoy that was built in Nigeria.

The SPM buoy that was installed at Nigerdock, Snake Island in Lagos is one of the world's largest. With the fabrication and installation of this SPM buoy, Shell demonstrated that its logistics base in Nigeria can support other deep-water developments in other regions.

In March and April 2017, Bonga undertook a major turnaround maintenance, which covered statutory and regulatory checks, inspections, recertification, repairs and replacement of equipment as well as an upgrade of facilities. The 2017 exercise was the most complex and largest of the three previous turnaround maintenances in the 12-year history of Bonga and will help to ensure safe and sustained production and reduced unscheduled production deferments.

For the Bonga team, this was another opportunity to excel after receiving Shell Group’s 2016 ‘Asset of the Year’ award. Planning for the turnaround commenced two years earlier in 2015, while the actual exercise lasted approximately 85 days. More than 1,000 people and more than 50 Nigerian contractor and sub-contractor companies participated in the exercise.

In addition to procuring materials directly from original equipment manufacturers at competitive rates which saved costs and ensured seamless delivery of materials, all fabrications were done in Nigeria. This innovation marked a turning point in SNEPCo’s efforts to develop the capabilities of Nigerian companies in the provision of goods and services in deep water oil and gas production. More details on developing the local skills, talent and contracting capacity of the Nigerian oil and gas industry can be found in the ‘Nigerian Content Development’ section of the Briefing Notes.

Growth Opportunites

SNEPCo is committed to further unlocking Nigeria’s deep-water resources and along with its co-venture and government partners is evaluating opportunities to further increase production of the Bonga field in an efficient and cost-effective way. One such opportunity is the Bonga South West/ Aparo (BSWA) Project. In June 2017 SNEPCo organised multi-stakeholder local content workshops on the potential opportunities the project may bring to Nigerian service providers. This was in fulfilment of mandatory requirements by the Nigeria Content Development and Monitoring Board. A decision on progressing the BSWA project is currently being awaited.

SNEPCo is also a co-venture partner in the Erha field, which is operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited. Located 140 km offshore in the Gulf of Guinea at water depths of between 1,200 and 1,800 metres, production commenced in 2006. The Erha FPSO has a production capacity of 210,000 barrels of oil per day. In recent years, the field has expanded production with both the North Phase 2 and 3 projects coming on stream ahead of schedule in 2015 and 2017 respectively.

More In Briefing Notes

Portfolio

Shell Companies in Nigeria continue to strengthen their position in the country for the long term by optimising their onshore oil footprint while making investments in other areas, particularly deep water and the gas value chain, including domestic gas.

Social Investment

Shell Companies in Nigeria work with government, communities and civil society to fund and implement social programmes that have a lasting impact on people’s lives in the Niger Delta and Nigeria as whole.