SPDC JV Paid N5.31tn to FG in Four Years


NNPC reviews operational KPIs to survive uncertainties in oil industry

By Sylvester Idowu in Warri and Chineme Okafor in Abuja

Shell Petroleum Development Company (SPDC) joint partners’ economic contribution to the federal government between 2013 to 2017 stands at $23 billion (N5.31 trillion).
The revelations came as the Nigerian National Petroleum Corporation (NNPC) yesterday disclosed that it would review the key performance indicators (KPIs), and other operational strategies it had given to its subsidiaries to boost its plan of becoming a fully integrated national oil company.
The monies were paid under the joint venture agreement between government-owned NNPC, 55 per cent; SPDC, 30 per cent; Total E&P Nigeria Limited, 10 per cent; and the Eni subsidiary Nigerian Agip Oil Company Limited, five per cent.
Shell’s share of royalties and corporate taxes paid to the federal government in 2017 stood at approximately $1.1billion (N333.33 billion), SPDC $0.4billion; SNEPCo $0.7 billion).
This was contained in latest edition (April 2018) of ‘Shell in Nigeria Briefing Notes’ which was presented to journalists in Warri, Delta State over the weekend.

The copy of the document which was obtained by THISDAY indicates that Shell also paid $1.9 billion to the Niger Delta
Development Commission (NDDC) since inception in 2002.
According to the report, the oil bearing communities social investment funds for community-driven projects under the Global Memorandum of Understanding (GMoU) was $228 million (N41.10billion).
The company stated that 94 per cent of Shell contracts was awarded to Nigeria companies in 2017 while 631,000 barrels of oil equivalent per average daily production by Shell-operated ventures in Nigeria in 2017.
As part of effort to support local content, develop human resources, Shell in 2017 spent about $0.76 billion (N230.30 billion) on contracts awarded to Nigerian companies.
The report says between 2012 and 2017, the Nigeria Liquefied Natural Gas Company Limited (NLNG) of which Shell contributes 25.6 per cent share, has committed over $45 million (N14.19 billion) to social investment projects in the Niger Delta region.

According to the report, Shell is also contributing $49 million (15.36 billion) to the construction of the 34-kilometer Bonny-Bodo road project estimated to cost more than $190 million (N60 billion) as part of federal government socio-economic integration of the Niger Delta region.
The report says Shell Nigeria Gas Limited (SNG), another of its sister firms, supplies natural gas to about 90 industrial and commercial customers, majority of which were in Ogun, Rivers and Abia States, adding that the gas is used for power generation and for the manufacturing of domestic products.
The presentation was made by senior SPDC’s officials including Head, Government and Community Relations, Alaye Dokubo; Head Community Interface, Evans Krukrubo, Community Interface Coordinator, Jerry-Gaultney Udjo, as well as Shell Petroleum Development Company, Media Relation Manager, Bam Olugbenga Odugbesan, (SPDC West)’s Media Relations Officer, Mr. Joseph Obari, Precious Okolobo among others.
Before the presentation, SPDC General Manager, External Relations, Mr. Igo Weli, had said SPDC is still very active in Delta State contrary to widespread believe that it had relocated from the state.
To confirm the company’s presence in Delta State, he disclosed that Shell operates Joint Ventures has implemented wide ranging projects in the state which included the disbursement of N1.88 billion to Global Memorandum of Understanding (GMoU) with cluster host communities.

He also disclosed that a Professorial Chair was established at Federal University of Petroleum Resources, Effurun (FUPRE) as part of Shell’s continuous operations in the state and contribute to its development.
“These are in addition to the donation of N600 million facilities to five schools under a Youth Sports and Athletics Development project to mark Nigeria’s centenary anniversary.
“The projects shows our continuous presence and interest in the development of Delta State. While it is true that SPDC divested from a number of assets in line with business strategy, and in support of the participation of more Nigerian companies in the oil and gas industry, we are still active in Delta State,” Mr. Weli said.
He gave, as example, that SPDC still operates Forcados Terminal, Flowstations, gas plants and a network of pipelines in the state.
Meanwhile, the NNPC stated that the reviews would enable it prosper as an oil company despite the changing dynamics of the global oil industry.

Its Group Managing Director, Dr. Maikanti Baru, said this at the corporation’s first quarter 2018 top management steering committee meeting held in Abuja.
A statement from the corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, quoted Baru to have admitted that there were tremendous changes going on in the global oil industry which NNPC must plan well to survive through.
Baru explained that apart from the review of its operational KPIs, the other new strategies to be adopted by NNPC would include setting realistic targets for immediate sign-off, as well as spending items capable of improving its bottom-line.
All these, Baru noted would become NNPC’s long-time survival strategies to achieve efficiency, growth and profitability in its operations.
“The changes we are seeing in the industry over the last few years call for some action on our part. This is because as a business concern, we don’t live in isolation in the industry and therefore, we must act now,” said Baru in the statement.

According to him, the NNPC was accelerating its action on the holistic rehabilitation of its four refineries in Kaduna, Warri, and Port Harcourt, in addition to strengthening its internal control mechanisms and intensifying exploration efforts in the frontier oil basins.
He added: “Today, we are reviewing the mission and vision of the corporation and have also ventured into renewable energy and power sectors.”
The statement equally quoted NNPC’s Chief Operating Officer (COO), Downstream, Mr. Henry Ikem-Obih, to have explained that a lot of work had been done to get the corporation to measure up with its peers.
Ikem-Obih, noted that the corporation was investing a lot in downstream supply and distribution assets, and that now its focus in the sector revolved around imbibing world-class culture, implementing best practices, focusing on cost reduction, improving efficiency, deploying cutting-edge technologies and having a clean balance sheet that reflects its corporate business vision.

He said: “Gradually, we are repositioning from an intervention engine for the nation to one that is ready to make profit, grow and create value for our teeming stakeholders.”
Similarly, NNPC’s Group General Manager, Corporate Planning and Strategy Division, Mr. Bala Wunti, said the essence of the meeting was to review performance, redefine expectations, identify areas of improvement and implement actionable items that would boost efficiency and high profitability.
Wunti, noted that the meeting had brought to the fore areas yearning for further improvement which the division would vigorously pursue to ensure profitability and growth for NNPC.
He said: “It is important that we do what we need to do like any other NOC to move on the upward trajectory and be able to achieve our mandate of delivering value to our major shareholders, who are Nigerians.”