•Chevron target $19.5bn global spend
By Adewale Sanyaolu
Oil super major, Shell has pledged to spend $1 billion within the next 10 years to boost natural gas production for domestic supplies and exports.
The commitment is part of a $5 billion investment opportunity in Nigeria’s offshore Bonga North oil project and is coming after President Bola Tinubu held talks with Shell executive Zoe Yujnovich in a move to attract capital to the country.
Yujnovich was quoted as saying Shell has “an imminent $5billion investment opportunity” in the project and that “we want to continue and build a pipeline of new investments in Nigeria.”
Oil production in Nigeria Africa’s top producer has been in decline for years, hurt by theft and sabotage, but has picked up in recent months, helped by offshore production that is less prone to attacks.
Bonga North is a conventional oil development located in deepwater in Nigeria and is operated by Shell Nigeria Exploration & Production.
According to GlobalData, which tracks more than 34,000 active and developing oil and gas fields worldwide, Bonga North was discovered in 2005, lies in block OML 118 (OPL 212P), with water depth of around 3,346 feet.
The project is currently in feasibility stage and is expected to start commercial production in 2025.
Final investment decision (FID) of the project will be approved in 2024 with the development cost expected to be $5.455 million.
Meanwhile, Chevron Corporation has announced plans to support its planned increase in long-term crude production by raising its global capital spending for 2024 to reach a range of $18.5 billion to $19.5 billion in 2024, up from $17 billion this year, Chevron said.
The Permian basin will account for the largest portion of that investment at $5 billion.
Chevron’s financial performance was the strongest of all the oil supermajors through the pandemic, but its stock has declined roughly 20 per cent this year twice the drop seen for Exxon as investors fretted about growth potential outside the Permian.
Chevron Chief Executive Officer, Mike Wirth, is attempting to remedy that by purchasing Hess Corp., which would secure Chevron a 30 per cent stake in Exxon’s groundbreaking Guyana project.
After the deal closes in the first half of next year, Chevron said Wednesday its annual budget will be in the range of $19 billion and $22 billion.
Although BP Plc and Shell Plc have pivoted back toward fossil fuels after investors planned hard pushes into greener initiatives, indications are the European companies won’t see significant oil growth in the medium term.
The U.S. supermajors, in contrast, aim to maintain their premium stock-market valuations by using last year’s record profits to increase production, notably in the Permian basin.