• Thursday, July 25, 2024
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BusinessDay

Shell says it paid Nigeria $44bn royalties, taxes in 4 years

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In spite of the operational challenges faced in the Niger Delta, Shell Petroleum Development Company of Nigeria Ltd (SPDC) paid the sum of $44 billion in royalties and taxes to the Federal Government between 2009 and 2013.

This is part of the company’s contribution to the Nigerian economy in the period under review.

In 2013, SPDC and its subsidiary, Shell Nigeria Exploration and Production (SNEPCO), paid $4.0 billion as their share of royalties and taxes to the Nigerian government (SPDC $2.6 billion, SNEPCO $1.4 billion) to underscore the challenges of doing business.

The two companies also paid $1.5 billion, being value of SPDC and SNEPCO contracts awarded to Nigerian companies in 2013.

The companies’ disbursements to the Niger Delta Development Commission (NDDC) in 2013 amounted to $180.6 million, with SPDC contributing $69.8 million. In terms of community development, the companies also made joint contributions of $104 million, with about $32 million coming from SPDC.

According to the company’s annual sustainable report for 2013, which was presented to the public yesterday, 95 percent of the share of the revenue after costs from each barrel of oil goes to the government.

The report also said the companies have in their employ about 4,000 Nigerians.

Shell is the operator of a joint venture between the government-owned Nigerian National Petroleum Corporation (NNPC 55 percent), Shell (30 percent), Total (10 percent) and Agip (5 percent). It also holds interests in a number of offshore licences, including the Shell-operated Bonga field, where it also has 55 percent equity interest. Shell also has a 25.6 percent interest in Nigeria Liquefied Natural Gas (NLNG), which exports LNG around the world.

Crude oil theft and sabotage continued to affect the company’s operations in the Niger Delta during 2013. This had severe social, economic and environmental implications.

“We are working with our sector, governments, non-governmental organisations and the international community towards ending the theft and sabotage,” the report stated.

“During 2013, production was shut down many times to remove illegal connections to pipelines and make repairs. These shutdowns limit the environmental impact of theft and sabotage along SPDC’s pipeline network. However, it also reduces SPDC’s production leading to lost revenues for SPDC and the Nigerian government,” it said.

On spills, SPDC stated that it continues to improve its infrastructure within this deteriorating security situation, a situation which, it claimed, has led to a reduction in the number of operational spills from its operations, which fell from 37 in 2012 to 30 in 2013. The volume of operational spills from its operations increased to 0.4 thousand tonnes.

“Around 0.3 thousand tonnes of this volume was from a single spill. In 2013, the number of spills caused by sabotage and theft increased to 157, compared to 137 in 2012. However, the volume of oil spilled due to sabotage and theft decreased to 2.2 thousand tonnes. This decrease was due to intensified inspection of facilities, including over-flights,” the report said.

“Operational spills accounted for around 15 percent of the total volume spilled from SPDC facilities in 2013. A key priority for SPDC is to achieve its goal of no operational spills. In 2013, it continued work to maintain and replace pipelines and other infrastructure and, in the past three years, SPDC has replaced around 770 km of pipeline,” it stated.

Olusola Bello