Will Investors Stay This Time?

When Shell’s chief executive, Wael Sawan, met with President Bola Tinubu at the Presidential Villa last week, the signal from the oil major was clear: Shell now sees Nigeria as a place where long-term investment decisions can be made again.

Sawan told the President that Shell and its partners are prepared to commit up to $20 billion in new investments to Nigeria’s oil sector, marking a notable shift from the caution that defined the company’s approach in recent years. He attributed the change to what he described as Tinubu’s “robust and bold leadership,” saying recent reforms had improved stability and predictability for investors.

“Your leadership and your vision have created an investment climate that has propelled us to invest in Nigeria, especially when we compare it with other opportunities around the world,” Sawan said.

Shell’s renewed interest is centred on offshore oil, particularly the proposed Bonga South West deepwater project, which could become one of the largest energy investments globally if it reaches Final Investment Decision (FID). Of the projected $20 billion, roughly half would be capital expenditure, with the rest spread across operating costs and related spending within Nigeria over time.

The offshore focus reflects a wider recalibration in Nigeria’s oil strategy. Onshore production has been weighed down by crude theft, vandalism, community conflicts, and rising security costs, eroding returns and deterring new capital. Offshore projects, while more expensive upfront, are largely insulated from these risks and offer the scale and operational predictability that international oil companies now favour.

To support Bonga South West, President Tinubu approved the gazetting of targeted, investment-linked incentives for Shell and its partners, directing that they be implemented within Nigeria’s existing legal and fiscal framework. The President stressed that the measures were narrowly defined.

“These incentives are not blanket concessions,” Tinubu said. “They are ring-fenced and investment-linked, focused on new capital and incremental production, strong local content delivery, and in-country value addition.”
He also set a clear timeline, saying the project must reach FID within the first term of his administration.

Shell says its growing confidence in Nigeria is already reflected in recent spending. The company has invested about $5 billion in Bonga North, $2 billion in its HI project, and additional sums in gas developments linked to Nigeria LNG. It has also increased its exposure to OML 118, the Bonga block, following the purchase of TotalEnergies’ interest.

Still, industry analysts caution that incentives alone may not be enough to reverse years of investor hesitation. Nigeria’s oil sector has experienced similar periods of optimism in the past, only for projects to stall amid regulatory delays, fiscal disputes, or policy reversals. Even with improved terms, oil majors continue to weigh broader risks, including currency volatility, capital repatriation concerns, and the accelerating global shift toward cleaner energy.

For companies making multi-decade investment decisions, the issue is no longer just the attractiveness of incentives, but whether policy consistency and regulatory clarity can be sustained over time.

Sawan acknowledged the long-term horizon, noting that stability now carries a premium for global energy firms choosing between competing destinations. He also praised the professionalism of the President’s economic and energy team, saying it had strengthened Shell’s confidence, as well as that of its partners.

For the Tinubu administration, Shell’s renewed commitment is both an endorsement and a test. High-profile investment pledges help rebuild Nigeria’s standing with international investors, but credibility will ultimately depend on execution. Whether Bonga South West moves swiftly from incentives to construction will be closely watched across the industry.

Nigeria is clearly making a renewed bid for big oil. Whether investors stay this time will depend less on the generosity of today’s terms and more on the consistency of tomorrow’s policy.