The Sun News (Nigeria): Shell Pays $3.7bn taxes to FG, $53m on Community Development

By DENNIS MERNYI, Abuja
Friday, August 10, 2007

Nigeria’s treasury got bigger last year with Shell Petroleum Development Company (SPDC) Nigeria in conjunction with its subsidiary – Shell Nigeria Exploration and Production Company (SNEPCo) – paying about $ 3.7 billion in various taxes to the coffers of the Nigerian government in 2006 alone.

Shell also posited that not less that $53 million has been spent in community development programs in the Niger Delta areas of its operations for the same year.

This was made known in Abuja by SPDC Abuja Relation Manager, Ahmed Abubakar, citing Shell Nigeria Annual Report for 2006, at the opening of a seminar for faith-based organization, on finding sustainable peace for the Niger Delta.

The report says that the SPDC paid $2.1 billion in Petroleum Profit Tax (PPT), a 32% decrease from 2005 due to lower oil production. It paid $771.7 million in royalties compared to $1.2 billion in 2005.

Similarly, the SPDC Joint Venture (JV) paid its statutory contribution to the Niger Delta Development Commission (NDDC) last year to the tune of $75.2 million of which shell contributed $22.6 million. On the Education Tax Fund (ETF) the company reported that it paid $54 million, having paid a total of $154.5 million into the Fund over the years.

On the part of SNEPCo, Shell said the company paid $594.8 million in royalties and profit from Shell-funded interest in Bonga, Abo and Erha deep-water fields. The report added that SNEPCo added another $4.7 million as ETF and $38.9 million as its contribution to the NDDC.

The report however pointed out that, “the total amount allocated in 2006 by the Federal government to the 36 states of Nigeria was $10 billion. Of this, nearly 36 per cent went to the four states, which the SPDC/SNEPCo are based.

The report however, referenced a Central Bank of Nigeria (CBN) estimate which put Nigeria’s loss of some 600,000 barrels of oil per day to attacks in 2006, resulting in a short-fall of $4.4 billion revenue to Nigeria.

Part of the report observed further that: “alongside the attacks on our facilities were incidents of crude oil theft and community disruptions to operations. There were 89 incidents of crude oil theft resulting in an estimated average crude oil loses of between 16,000 and 24,00 barrels per day compared to 20,000 barrels per day and 40,000 in 2005.

“A total of 207 persons were arrested, while 48 tankers, 21 vehicles and 18 barges were seized by the authorities”, says the report.

On community development the report said, that it spent $53 million in 2006 compared to $32 million in 2005.

“The increase covers a commitment to finish incomplete projects and upgrade existing hospitals and healthcare facilities. During the year, we completed 131 community projects, with an increased emphasis on those that were stalled in 2005. About 66 were completed last year bringing to 82 the numbers of stalled projects completed to date.

“Work was ongoing on 215 stalled projects during the year, while the remaining 284 projects will become part of the Global Memorandum of understanding (GmoU) of the relevant community clusters”, it said.

Speaking earlier, the Corporate Brand and Public Relations Manager of SPDC, Mr. Vincent Okwechime, said that the first of such seminar had taken place in Port Harcourt last year. He said that Shell is relying on the moral force of religious leaders to preach the importance of dialogue over violence in resolving conflicts in the Niger Delta.

”As independent and credible organizations”, he said, you can be trusted to provide constructive criticism without bias or sentiment”, he told the men and women of God gathered.

Participants were drawn mainly from leading Christians and Muslims organization in Nigeria.

Most of the participants said that the amount of money allocated to the states of the Niger Delta couldn’t be justified on ground.

http://www.sunnewsonline.com/webpages/news/businessnews/2007/aug/10/business-10-08-2007-002.htm

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