Saipem, a global leader in engineering, procurement, construction, and installation (EPCI) services, has secured a landmark $900 million contract for the development of Shell’s Bonga North project, located offshore Nigeria. This award further solidifies Saipem’s strong presence in deepwater operations and highlights its long-standing partnership with Shell in Africa’s energy sector.
Project Overview
The Bonga North project is a significant expansion of Shell Nigeria Exploration and Production Company’s (SNEPCo) flagship Bonga field, which has been operational since 2005. Situated in Oil Mining Lease (OML) 118, approximately 120 kilometers southwest of the Niger Delta in water depths exceeding 1,000 meters, the Bonga North development is expected to add approximately 120,000 barrels per day (bpd) to Nigeria’s oil production.
The project involves the development of new subsea production infrastructure, which will be tied back to the existing Bonga Floating Production Storage and Offloading (FPSO) vessel. The Bonga FPSO, one of the largest vessels of its kind, has been pivotal in Nigeria’s deepwater oil and gas production.
Scope of Work Under Saipem’s Contract
Under the awarded contract, Saipem will be responsible for a comprehensive suite of services, including:
- Engineering, Procurement, Construction, and Installation (EPCI) of subsea umbilicals, risers, and flowlines (SURF) to facilitate the efficient transfer of hydrocarbons from the subsea wells to the FPSO.
- Installation of Subsea Production Systems (SPS) to enhance oil recovery and maximize field output.
- Fabrication and Integration of critical infrastructure components at Saipem’s fabrication yard in Nigeria, ensuring compliance with local content requirements.
- Deployment of Advanced Offshore Installation Vessels, such as the Saipem 7000, a state-of-the-art semi-submersible crane vessel equipped for deepwater construction.
- Commissioning and Start-up Support to ensure seamless integration with existing infrastructure and optimize production efficiency.
Strategic Importance of the Bonga North Project
The Bonga North development plays a crucial role in Shell’s broader strategy to sustain oil production in Nigeria and optimize its deepwater assets. As international oil companies (IOCs) face increasing pressure to balance production growth with environmental and regulatory challenges, Shell’s investment in Bonga North demonstrates its commitment to maintaining a strong presence in Nigeria’s offshore sector.
Additionally, this project aligns with Nigeria’s objective of increasing offshore production to bolster national revenues. The Nigerian government, through the Nigerian Content Development and Monitoring Board (NCDMB), has been actively pushing for greater involvement of local companies in offshore oil and gas projects. Saipem has committed to meeting these requirements by leveraging its established facilities in Nigeria and engaging indigenous contractors for various project phases.
Saipem’s Competitive Edge and Market Position
Saipem has a long history of executing complex offshore projects in Nigeria and across the globe. The company’s deepwater expertise, advanced fleet of construction and installation vessels, and strong track record in similar projects made it the preferred choice for Shell.
Alessandro Puliti, CEO of Saipem, expressed confidence in the company’s ability to deliver on the contract, stating: “We are honored to partner with Shell once again on a strategic project like Bonga North. This award reaffirms our technical expertise and our commitment to delivering world-class offshore solutions while supporting local content initiatives in Nigeria.”
Saipem’s previous experience in Nigeria includes major projects such as the Egina FPSO development, the Forcados-Yokri integrated project, and the ongoing execution of deepwater pipeline infrastructure. These successes have reinforced its reputation as a key player in Nigeria’s offshore industry.
Economic and Industry Implications
The Bonga North contract award comes at a crucial time for Nigeria’s oil and gas sector, which has been facing production declines due to operational challenges, aging infrastructure, and regulatory uncertainties. The project’s successful execution is expected to:
- Boost Nigeria’s Oil Output: With an estimated 120,000 bpd production addition, the project will contribute significantly to Nigeria’s overall output and revenue.
- Enhance Local Content Development: Saipem’s commitment to utilizing Nigerian fabrication yards and engaging local subcontractors will create job opportunities and support skill development.
- Attract Further Investments: A successful execution of the Bonga North project could encourage other international oil companies to pursue new deepwater developments in Nigeria.
- Strengthen Saipem’s Market Position: The company’s ability to deliver complex offshore projects will further cement its reputation as a preferred EPCI contractor in Africa.
Project Timeline and Execution Plan
Saipem is expected to commence engineering and procurement activities immediately, with offshore installation phases set to begin in 2026. The project will be closely monitored by both industry stakeholders and regulatory bodies to ensure timely execution and compliance with Nigeria’s environmental and operational standards.
Upon completion, the Bonga North development will mark another milestone in Nigeria’s offshore oil and gas industry, reinforcing the country’s position as a major player in the global energy market.
With this latest contract, Saipem continues to strengthen its deepwater portfolio, demonstrating resilience and adaptability in a dynamic global energy landscape. The success of the Bonga North project will be instrumental in shaping the future of offshore oil production in Nigeria and beyond.
