Shell Pays $29bn to Nigeria in Five Years


• PENGASSAN orders members to stop work in Shell, Agip, opens talks with ExxonMobil
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The Shell Petroleum Development Company of Nigeria Limited (SPDC)-operated joint venture has stated that it contributed $29 billion to the Nigerian purse between 2012 and 2016, with SPDC paying $1 billion in royalties and corporate taxes in 2016, while Shell Nigeria Exploration and Production Company (SNEPCo) paid $400 million.

The Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, who stated this yesterday, added that the company remains strongly committed to the development of Nigeria.

This is coming as oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) yesterday directed its members who perform administrative duties in Shell and Nigerian Agip Oil Company (NAOC) to embark on strike, which started in Chevron yesterday, in solidarity with their members in ExxonMobil.

However, unlike PENGASSAN’s action in ExxonMobil, where the union shut the gates of the company’s offices from the hours of 8a.m .to about 12.30p.m. daily since last week, normal activities were seen to be ongoing in Shell, Chevron and Agip’s offices in Lagoson Tuesday.

But the Port Harcourt Zonal Chairman of PENGASSAN, Azubuike O. Azubuike, told THISDAY yesterday that the strike in other IOCs was very effective in Port Harcourt Zone.

Presenting the company’s 2017 briefing notes, Osunbor further stated that Shell-operated ventures in Nigeria recorded an output of some 572,000 barrels of oil equivalent per day in 2016.
He also commented on crude theft and other security issues in Shell operations, saying that crude oil theft on SPDC’s pipeline network resulted in a loss of about 5,660 barrels of oil per day in 2016, which is less than the 25,000 bpd in 2015.

Osunbor also disclosed that the number of sabotage-related spills declined to 45 compared with 93 in 2015.
“The reduction in oil theft and sabotage-related spills from the previous year can be attributed to continued improvements in air and ground surveillance and response by government security forces, lower production levels at SPDC JV operations in the Western part of the Niger Delta due to acts of sabotage and our divestment from key pipelines in 2015,” he explained.

“We continue to work with the government and other key stakeholders on the security challenges in our operating environment and look towards sustained and fruitful operations for the benefit of the Nigerian state and all other shareholders,” he added.

Okunbor said the determination of Shell to support the monetisation of the nation’s huge gas resources led it to establish Shell Nigeria Gas in 1998, which now supplies gas to about 90 industrial customers in Ogun, Rivers and Abia States, for power generation and manufacture of domestic products ranging from household consumables, to household utensils and hardware.

He disclosed that Shell companies in Nigeria paid special attention to the welfare of host communities, making Nigeria the second largest recipient of social investment spending in the Shell Group after the United States.
“Areas of focus include community and enterprise development, education, health, access-to-energy, and since 2016, road safety. This is in addition to community-driven development programmes and initiatives delivered through the Global Memorandum of Understanding (GMoU), which target themes as determined by benefiting communities,” he said.

In a bid to involve more Nigerian contractors in Shell operations, Okunbor said the Shell Contractor Funding initiative was expanded with eight participating banks committing about $2.2 billion to fund contract execution by Nigerian companies working for Shell Companies in Nigeria.

“Since the commencement of the programm in 2011, loans worth approximately $1 billion have been awarded to 220 small and medium-sized Nigerian enterprises with no recorded defaults on repayment. The Shell Contractor Fund was approved by the Organisation for Economic Cooperation and Development (OECD) at its plenary session on “Shared Value creation and local content” in December 2016 and included in the compendium of global best practices,” Okunbor said.

The Shell boss, who presented the company’s 2017 briefing notes through Shell Nigeria’s Communications Manager, Mrs. Sola Abulu,noted that SNEPCo added to the group’s efforts to improve the capability of Nigerian vendors and service providers in deep water operations by assigning significant portion of work to this category of contractors in its recently-concluded turnaround maintenance at Bonga field.

In a related development, PENGASSAN yesterday directed its members who perform administrative duties in Shell and Nigerian Agip Oil Company (NAOC) to embark on strike in solidarity with their members in ExxonMobil.
But while normal activities were observed in offices of the IOCs in Lagos, the Port Harcourt Zonal chairman said the action was very effective in Port Harcourt zone.

He added that the strike, which was in solidarity with ExxonMobil, did not affect crude oil production.
After it had shunned a meeting convened in Abuja last week by the Minister of Labour and Productivity, Dr. Chris Nigige, the oil workers yesterday commenced negotiations with ExxonMobil in Lagos, the first talks between the two parties since the union embarked on their action last week.

The meeting, scheduled for yesterday evening, was to find solutions to the week-long picketing of the company.
THISDAY gathered that before the minister invited the workers to a meeting, the company had invited the union leaders to a meeting in Lagos but the meeting could not hold as a result of disagreement between the union and the management on the actual number of union leaders that would represent the workers.