Shell contributes $29 billion to Nigerian government in 2016

The Shell Petroleum Development Company of Nigeria Ltd (SPDC) operated Joint Venture alone contributed $29 billion to the Nigerian purse between 2012 and 2016.

Also in 2016, the royalties and corporate taxes paid by Shell Companies in Nigeria to the Federal Government came to $1.4 billion (SPDC $1.0 billion and Shell Nigeria Exploration and Production Company (SNEPCo) $0.4 billion). This is besides the energy which Shell Companies contribute to the Nigerian economy, with Shell-operated ventures in Nigeria recording an output of some 572,000 barrels of oil equivalent per day in 2016.

A breakdown of the production figure indicates that Shell-operated ventures in Nigeria produced an average of 572,000 barrels of oil equivalent per day (boe/d), with 369,000 boe/d from the Shell Petroleum Development Company of Nigeria Limited operated Joint Venture (SPDC JV) and 203,000 boe/d from the Shell Nigeria Exploration and Production Company Limited (SNEPCo).

Shell Nigeria Gas Limited (SNG) supplies natural gas to about 90 industrial customers in Ogun, Rivers and Abia States. The gas is used for power generation and processing by industries for the manufacture of domestic products ranging from household consumables, to household utensils and hardware. Among its customers are four compressed natural gas (CNG) companies that make the gas available to other companies outside the SNG pipeline network.

The SPDC JV is the major supplier of gas to Nigeria Liquefied Natural Gas Company Limited (NLNG) (Shell share, 25.6%). The SPDC JV Afam VI power plant, which has a 650 megawatt generating capability, supplied approximately 12% of the nation’s grid-connected electricity in 2016 and since its commissioning in 2008 has delivered 24.16 million Megawatt-hour (MWh) of electricity into the Nigerian grid.

According to the World Bank, in recent years Nigeria has depended on the oil and gas industry for as much as 90% of export income and 75% of overall government revenue. In 2016, the portion of total government revenue generated from the oil and gas sector was impacted by factors such as the recent decline in oil prices and lower oil production in the Niger Delta due to acts of vandalism and sabotage.

Shell Companies in Nigeria were one of the initiators and a leading sponsor of the Nigerian Extractive Industries Transparency Initiative, which publishes payments made to the government by extractive industries including international oil companies. The economic contribution* from SPDC JV partners to the Nigerian government between 2012–2016 was $29 billion. The Shell share of royalties and corporate taxes paid to the Federal Government of Nigerian in 2016 was approximately $1.4 billion (SPDC $1.0 billion; SNEPCo $0.4 billion).

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