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Despite the challenges of crude oil theft and pipeline vandalism, the federal government last year earned $4.48 billion from Shell companies in Nigeria in royalties, taxes and other payments.
This was published in Shell’s 2021 Sustainability Report last Wednesday and made available to The Tide in Port Harcourt.
In his introduction to the report, Shell CEO Ben van Beurden writes: “Our Powering Progress strategy, which we launched in 2021, sets out how Shell can play a leading role in helping the world reduce its carbon emissions. .
“At the heart of our strategy is our own goal to become a net-zero energy company by 2050, in line with society’s progress in meeting the Paris climate goals. In this 25th sustainability report, we explain how we are working to achieve our Powering Progress goals.
Shell has also released its 2022 update to the industry association climate review.
It provides an update on progress on actions Shell has taken over the past year to address differences in climate-related positions with industry associations where the company has identified misalignment.
It also provides a summary of how much Shell paid to 36 associations in 2021.
In addition, Shell has released its 2021 Government Payments Report covering the countries where it has exploration and production activities.
This report details payments in 25 countries and has been prepared in accordance with UK regulations The Reports on Payments to Governments Regulations 2014 (as amended December 2015).
He said Nigeria’s crude production performed suboptimally last year due to theft and vandalism of assets despite improved quota allocation from the Organization of Exporting Countries. oil (OPEC).
Shell companies including Shell Petroleum Development Company of Nigeria Limited (SPDC), Shell Nigeria Exploration and Production Company Limited (SNEPCo) and Shell Nigeria Gas (SNG) paid the government $6 billion in direct taxes between 2015 and 2020. , according to the Federal Inland Revenue Service (FIRS).
Shell’s largest payment in Nigeria last year was to the Nigerian National Petroleum Company (NNPC) Limited with $2.89 billion in production rights.
The amount included a payment of $2.61 billion.
The company also paid $573.4 million in royalties and $511.27 million in taxes.
On an asset basis, Shell paid $1.55 billion for its OPL 212/OML 118 and OPL 219/OML 135 lot, covering the Bonga field.
Of the payments to Nigeria, $458.59 million came from Shell Petroleum Development Company (SPDC).
This Shell unit works through a joint venture with NNPC in the Nigerian onshore domain.
However, the company is working to reduce its land footprint.
Shell paid $20.86 billion in taxes in 2021.
Payments in Nigeria were 21.5% of the 2021 total, the lowest since 2017.
Nigeria also accounted for all incidents of sabotage and theft that caused spills for Shell in 2021.
The company reported that the number of spills fell to 106 from 122.
In addition, the volume has increased from 1,500 tons in 2020 to 3,300 tons in 2021.
In an attempt to prevent theft, SPDC has installed steel cages on wellheads in Nigeria.
By the end of last year, he had installed 283 cages, 62 of them with video surveillance.
SPDC owns 360 oil producing wells in Nigeria and 60 gas producing wells.
It also controls about 4,000 km of pipelines and conduits.
The SPDC joint venture reported gross production of 503,000 barrels of oil equivalent per day in 2020, in which Shell has a 30% stake.
Shell said SPDC continues to review its onshore oil portfolio in Nigeria.
“Over the past decade, SPDC has halved its licenses in this area,” the report said.
Recognizing Shell’s contributions to Nigeria, the FIRS last week named Shell as “Nigeria’s Leading Tax Compliance Organization for 2021”.
FIRS Executive Chairman Muhammad Mamman Nami noted that Shell companies have demonstrated their commitment to paying all government taxes, hence the two awards.
In his remarks, Osagie Okunbor, Managing Director of SPDC and Country Chairman of Shell Companies in Nigeria, said he was pleased that government partners and stakeholders recognize Shell’s significant contributions to Nigeria’s revenues through which the government can grow the economy and bring about developments. to every part of the country.
He said: “Nigeria is and will remain an important heart for Shell. We will continue to invest in the country to help meet its energy needs, with a focus on growing our deep water and gas positions.
Okunbor, who was represented at the event by an SPDC director and managing director, Business Government Relationship, Bashir Bello, said the Shell companies would remain committed to expanding their gas portfolio for domestic and export markets while increasing energy access for Nigerians. ”
Shell Plc said it paid the federal government a total of $1,594,974,771 in taxes, royalties and fees in 2021.
The company said the sum of $511,270,685 was specifically paid in taxes for 2021.
The report says industry associations and payments to governments put Nigeria’s production entitlement for the period at $2,885,571,789.
Shell also paid $573,430,812 in royalties to the Nigerian government and $510,274,274 in royalties.
According to Shell, Shell’s 2021 Sustainability Report describes progress towards many of its Powering Progress strategic ambitions and shares related social, safety and environmental performance data.

From: Nelson Chukwudi

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