Oil giant Royal Dutch Shell said its Nigerian subsidiary, Shell Petroleum Development Company Limited (SPDC) and Joint Venture (JV) partners, paid $29 billion to the Federal Government over the last five years.
This is contained in the oil majors 2016 Sustainability Report released yesterday. The report said the $29 billion was the economic contribution from SPDC JV partners to the government from 2012–2016.
It stated that $1.4 billion was Shell’s share of royalties and corporate taxes paid to the government last year, adding that SPDC’s share was $1billion, while Shell Nigeria Exploration and Production Company (SNEPCo) contributed $0.4 billion.
Also SPDC JV and SNEPCo contributed $106.8 million to Niger Delta Development Commission (NDDC) last year, pointing out that $48.5 million was Shell’s share.
It also noted that 94 per cent of contracts from Shell Companies in Nigeria (SCiN) were awarded to indigenous companies, adding that $0.74 billion was spent by SCiN on contracts awarded to local companies. Besides, it stated that 96 per cent employees of SCiN are Nigerians.
Shell stated that safety and security remain its top priorities and lamented that sabotage and vandalism caused a reduction in onshore oil and gas production last year.
“Shell has interests in several companies in Nigeria and they are major contributors to the economy. They produce oil and natural gas, distribute gas to industries in the country, produce liquefied natural gas (LNG) for export, generate revenues for the government and provide social investment. The Shell companies are also working with federal and state government agencies, communities and civil society to try to create a safe operating environment.
“SCiN continue to operate both onshore and offshore oil activities in the country, while investing in oil and gas production. SCiN are also working with the government and other partners to increasingly focus on developing gas production onshore and delivering gas to power plants and other industrial customers in order to drive economic growth,” the report added.
It said SPDC JV had a challenging 2016 due to further acts of sabotage and vandalism on oil and gas facilities in parts of the Niger Delta. As a result, oil and gas production from domestic and international operators declined sharply in the year.
“Export operations at the SPDC-operated Forcados oil terminal were disrupted after three sabotage incidents in 2016. This resulted in loss of revenue, particularly for domestic producers who rely on the terminal for export. Reduced oil and gas production in the Niger Delta also led to lower revenues for state and federal government and major disruptions to gas supply needed to power electricity for industry, businesses and public sector services.
“The safety of staff and contractors in Nigeria remains the top priority. The SCiN aim to mitigate security risks that may impact people, the environment and facilities. We only carry out operations where it is safe to do so. We also continue to engage with the government and non-governmental organisations (NGOs), as well as local communities, to help promote human rights and a peaceful and safe operating environment.