Nigeria granted Shell Plc a production-linked tax credit for a $20 billion deepwater project, an incentive that will be extended to other oil majors as Africa’s biggest producer seeks to boost output, according to people familiar with the matter.\n\nThe tax relief is tied to production volumes and aims to accelerate development of the Bonga Southwest field, part of Shell’s deepwater portfolio. Officials said the measure reflects the government’s push to attract investment amid declining output and fiscal pressures.\n\nShell has operated in Nigeria for decades and holds significant stakes in multiple deepwater blocks. The new credit could reduce the company’s effective tax rate on the project by several percentage points, improving economics in a high-cost environment.\n\nAnalysts note that similar incentives may be offered to TotalEnergies, ExxonMobil, and Chevron as Nigeria targets a production increase to 2 million barrels per day by 2027.

The policy shift underscores the country’s reliance on oil revenue despite diversification efforts.\n\nThe finance ministry confirmed the framework will be formalized in upcoming regulations.