Nigeria Earns $4.48b from Shell in Taxes, Royalties, Other Payments

For the 2021 financial year, Nigeria earned a total of $.38 billion from Shell in royalties, taxes and other payments despite challenges of oil theft and vandalism in the year under review. This is contained in Shell’s report of payment to governments which states the amount it’s paid to different countries in which it operates.

Comprising Shell Petroleum Development Company of Nigeria Limited (SPDC), Shell Nigeria Exploration and Production Company Limited and Shell Nigeria Gas, the group paid a total of $6 billion in direct taxes to Nigeria between 2015 and 2020. In 2021 alone, the company paid $2.89 billion to the Nigerian National Petroleum Corporation in production entitlement, including $2.61 billion in in-kind payments.

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Shell which has 360 oil-producing wells in Nigeria, 60 producing gas wells as well as 4,000 km of pipelines and flowlines, also notes that oil theft and vandalism caused the deaths of eight of its contractors.

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. The report also states that the SPDC was continuing its review of its onshore oil portfolio in Nigeria and has reduced its licenses in this area by half over the last decade.

Shell Nigeria had previously announced that it was looking to divest its shallow waters and onshore assets. Five Nigerian oil and gas companies were in talks to put in bids. The sale has attracted the attention of independent Nigerian oil firms including Seplat Energy, Sahara Group, Famfa Oil, Troilus Investments Limited, and Nigeria Delta Exploration and Production (NDEP). However, a high court has ordered Shell to suspend the sale of the assets pending its verdict on the company’s appeal of a $2 billion penalty imposed on it in 2020 for oil spillage and environmental degradation.

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