The OML license for the block partners Shell, Total, Exxon Mobil and Eni were renewed for another 20 years.
The Nigerian National Petroleum Corporation (NNPC) has signed a contract with its partners on oil mining lease OML 118 to expand the Bonga oilfield and unlock a $10 billion investment in the country's deepwater resources.
S&P Global Platts, which provides benchmark prices for commodity markets around the world, reported this on Wednesday.
OML 118 contains Bonga, Nigeria's first deepwater oil field which can produce 225,000 barrels per day of crude oil and 150 million standard cubic feet of gas per day.
It said Shell had previously said it would develop the Bonga Southwest project across three phases with a total potential yield of 3.2 billion barrels.
The report quoted NNPC as saying that the OML license for the block partners Shell, Total, Exxon Mobil and Eni were renewed for another 20 years and five agreements including settlements on a tax dispute and production sharing contracts were finalised.
"Over $10 billion of investment would be unlocked" in an expansion program on the Bonga field as a result of the settlement of the disputes," the S&P Global Platts report quoted Mele Kyari, NNPC group managing director as saying in a statement.
"This is an indication of a renewed confidence between NNPC and its partners between the Nigerian government and the investing communities."
"The deal would yield over $780 million in immediate revenues to the federal government and would also free the parties from over $9 billion in contingent liabilities," Mr Kyari said.
The report also quoted Osagie Osunbor, the country chair of Shell's Nigerian Operation as saying, " this renewal will do a lot to improve the relationship between Nigeria and Shell as the disputes had affected trust and investment".
In 2019, Shell had gone ahead to invite bids from international contractors to build a new 150,000 barrels per day floating production storage and offloading (FPSO) platform for Bonga Southwest.
The process was halted when Nigeria said it was reviewing the PSC agreement binding on the field, according to energy industry watcher &P Global Platts.
According to the report in 2019, Nigeria increased taxes on its deepwater oil production which was not welcomed by many international companies.
Shell, meanwhile, is currently working on divesting from Nigeria's onshore oil asset as it pushes for a future of investment in renewable and cleaner energy.