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allAfrica.com: Shell Declares N2trn Income

allAfrica.com: Shell Declares N2trn Income

“SHELL Petroleum Development Company (SPDC) has declared a net income of about $14.6 billion (about N2 trillion) from an output of 365 million barrels of crude in the 2004 business year.”

Monday 15 August 2005

Daily Champion (Lagos)

Sopuruchi Onwuka

Lagos

SHELL Petroleum Development Company (SPDC) has declared a net income of about $14.6 billion (about N2 trillion) from an output of 365 million barrels of crude in the 2004 business year.

It also declared payment of $3.8 billion (about N509.2 billion) in taxes and royalties to the Federal Government during the period.

Shell, with over 15 billion barrels of crude oil and condensate reserves in Nigeria, produces nearly half of the country’s estimated 2.4 million barrels per day for export.

The company operates the nation’s biggest joint venture (JV) and production sharing agreements in the upstream oil and gas sector which sustains the economy.

In Shell’s 2004 People and Environment Annual Report, presented to the media by Corporate External Affairs Director, Rev. Precious Omuku, weekend, the company’s production chart indicated average daily production of one million barrels for the year.

The crude export graph also presented in the report, indicated an average price of $40 per barrel ($40/bbl) for the year.

Based on a 2000 Memorandum of Understanding (MoU), the company’s petroleum profit tax to the Federal Government rose to 83 per cent from $1.2 billion (N160.8 billion) in 2003 to $2.2 billion (N294.8 billion) in 2004.

Royalty to the country also rose 50 per cent from $608 million (N81.5 billion) in 2003 to $904 million (N121.14 billion) in 2004.

The company declared statutory fund contribution to the Niger Delta Development Commission (NDDC) at $69 million (N9.3 billion) from the JV account, out of which $21 million (N2.82 billion) came from Shell.

Besides taxes and royalties, Shell stated that it also made significant payments to state and federal governments as employees’ income tax and to the Education Tax Fund (ETF).

On local content policy compliance, Rev. Omuku said 95 per cent of the company’s 5000 direct employees were Nigerians, besides 7000 contract staff and 20,000 contractors’ staff.

He added that Shell awarded $727 million (N97.42 billion) worth of contracts to local companies, 20 per cent of which came from the Niger Delta.

Describing 2004 as good in the company’s performance and operational records Rev. Omuku said trends in community incidents substantially went down in the year resulting in significant reduction in deterred production.

This, he attributed to the company’s new sustainable community development model which engages stakeholders’ collaboration in tackling specific needs of people.

He said the company, through the model, invested over $50 million (N6.7 billion) in cassava production and processing, roll-back malaria, HIV/AIDS abatement and mitigation, and rural telecommunication.

He, however, listed the challenges to include crude theft, spills resulting from vandalisation, and community resistance to personnel access to facilities.

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