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Federal earnings from Shell jump to $3.197bn in 2017 from $2.172bn in 2016

A new report released by Royal Dutch Shell on payments to the Nigerian government for its activities in the county has shown that whereas it paid federal government $2.172bn in 2016, there is a 19 per cent rise to $3.197bn in 2017.

The payments are made to the Nigerian National Petroleum Corporation (NNPC) via the prevailing joint venture deals in the Niger Delta.

Shell, in its ‘Report on Payments to Governments for the Year 2017’ released this week averred that the oil major said $765.526m was paid to the Federal Inland Revenue Service in taxes, down from $1.18bn in 2016.

Shell further explained that about $160.71m and $239,189 were paid to the Department of Petroleum Resources in royalties and fees, respectively, compared to $245.769m and N34.24m, respectively in 2016.

Shell said it paid N79.675m to the Niger Delta Development Commission in fees last year, compared to $125.14m the previous year.

More details from the report indicated that out of 29 countries, Nigeria received the highest payment from the oil major.

The oil major, in its 2017 Sustainability Report, said crude oil theft from Shell Petroleum Development Company of Nigeria Limited Joint Venture’s pipeline network amounted to around 9,000 barrels of oil per day last year, an increase from around 6,000 bpd in the previous year.

It stated, “The increase in 2017 can in part be explained by the militant-induced shutdown of the Forcados export terminal in 2016, which reduced opportunities for third-party interference.

“This demonstrates that continued air and ground surveillance as well as the action by the government security forces remain necessary to prevent crude oil theft. Since 2012, SPDC has removed more than 950 illegal theft points.”

Continuing, the Shell report disclosed that the number of operational spills from Shell companies in Nigeria increased from eight in 2016 to nine in 2017, but the volume of oil spilled in operational incidents decreased to 100 tonnes compared to 300 tonnes in 2016.

Other details include the observation that the number of sabotage-related spills in 2017 increased to 62 from 48 in 2016, saying “Theft and sabotage caused close to 90 per cent of the number of spills of more than 100 kilograms from SPDC JV pipelines, with the balance being operational spills”.

“In 2017, 92 sites were remediated and certified (out of 251 identified for this work), with 32 in Ogoniland. During 2017, 84 new sites requiring remediation were identified, of which eight are in Ogoniland. In total, there are 243 oil spill sites that require remediation.”

“Close to 80 per cent of gas flaring from Shell-operated assets in 2017 occurred in Iraq, Nigeria, Malaysia and Qatar.

“Our flaring increased by slightly less than 10 per cent from 7.6 million tonnes in 2016 to 8.2 million tonnes in 2017. This was primarily a result of increased production in Nigeria following the return to production of fields previously closed due to security issues. Work continues to bring additional gas gathering facilities online in Nigeria to reach our goal of no routine flaring by 2030,” Shell report said.

Shell noted that several new gas-gathering projects came on stream at the end of 2017 in Nigeria but the planned start-up dates for two projects had historically been delayed due to a lack of adequate joint-venture funding.

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