Shell, Exxon Mobil Deepwater Nigeria Bets Highlight Global Capital Competition

International oil majors Shell and ExxonMobil are making multibillion-dollar investment decisions in Nigeria's deepwater oil sector, highlighting a global competition for capital that may influence spending in mature basins like the Bakken. According to a report from OilPrice.com, Shell has taken a final investment decision on the Bonga North deepwater project and is pursuing Bonga South West.

The Bonga North project is expected to deliver peak production of 110,000 barrels per day, with first oil targeted by the end of the decade. ExxonMobil is also advancing plans for the Usan, Owowo, and Bosi developments, with potential investments running into the tens of billions of dollars, OilPrice.com reported.

This strategic pivot to deepwater projects follows a decade where majors reduced exposure to onshore Nigerian assets due to theft, sabotage, and regulatory uncertainty. The report notes that offshore projects now offer lower security risks, larger project scales, and more attractive fiscal terms from the Nigerian government.

Concurrently, Nigeria's 650,000-barrel-per-day Dangote Refinery is preparing for what could become the largest initial public offering in African history. The refinery is seeking to raise around $4 billion at a valuation of roughly $40 billion, according to OilPrice.com.

The massive refinery project has already begun transforming Nigeria's energy landscape, turning the country from a net fuel importer into a supplier for its domestic market and an exporter into West Africa. However, the report states the refinery's need for reliable crude supply has exposed a domestic production weakness, forcing it to import crude from countries like the UAE and Libya because Nigerian supply has been insufficient.

For Bakken operators and North Dakota's oil sector, these international developments underscore the intense global competition for finite capital investment from major integrated companies like ExxonMobil and Shell. As these corporations commit tens of billions to large-scale, long-cycle international deepwater projects, it may influence capital allocation strategies for their onshore U.S. portfolios, which include Bakken assets.

The success of Nigeria's deepwater incentives and the planned Dangote Refinery IPO also highlight alternative global investment avenues for energy capital. A successful $40 billion listing would test Nigeria's capital markets and potentially signal investor appetite for large-scale energy infrastructure projects elsewhere.

The broader industry context, where companies are prioritizing projects with lower security risks and favorable fiscal terms, may serve as a reminder to Bakken stakeholders about the importance of a stable regulatory and operating environment to attract and retain investment in a competitive global landscape.