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Nigeria: Shell Awards N130.5 Billion Contracts to Local Firms

Daily Independent (Lagos) allAfrica.com

25 August 2009

Lagos — Oil giant, Royal Dutch Shell said at the weekend that it awarded contracts of over N130.5 billion ($900 million) to indigenous companies in 2008.

The company stated this in a statement, insisting that its subsidiaries in Nigeria also paid more than $34 billion to the government in the past four years (2005-2008) “as taxes, royalties and energy production”.

Media Manager of the company in Nigeria, Tony Okonedo, who gave the statement to newsmen in company of his contemporary in Social Performance unit, Emeka Obi, stated the oil multinational and its Joint Venture (JV) contributed more than N5 trillion ($34 billion) to the Nigerian government between 2005 and 2008.

The payment, which the company’s subsidiary in Nigeria, Shell Nigeria Exploration and Production Company (SNEPCO) and Shell Petroleum Development Company (SPDC) confirmed in a press statement, is the company’s JV “contribution to the economic development of Nigeria, which involves the production of oil and gas and payment of royalties and taxes.”

Okonedo noted that SPDC would not cease to uplift the welfare of inhabitants of communities that host its Eastern and Western operations.

SPDC’s contribution to the economic development of Nigeria, the statement continued, “involves the production of oil and gas and payment of royalties and taxes. For example, from 2005 to 2008, the Joint Venture operated by SPDC contributed more than $34 billion to the government.”

The statement continued: “The Federal Government receives about 95 percent of the revenue after costs from our onshore production in the Delta. The Shell Nigeria Exploration and Production Company (SNEPCO), which manages our offshore business in deep water, has paid nearly $2 billion in tax and royalties over the last four years.”

Maintaining that its operated venture produced an average of more than 850, 000 barrels of oil equivalent per day (boe/d), around 39 per cent of the country’s total oil and gas production in 2008, the company insisted that its JVs “awarded more than 90 per cent of all their contracts in Nigeria-worth more than $900 million to Nigerian companies.”

It added: “As far as possible, we aim to use Nigerian contractors and hire workers from the local communities where we operate.”

The largest contribution by Shell companies in Nigeria is, according to the statement, through the taxes and royalties “we pay and the energy we produce. Nigeria depends on the oil industry for approximately 95 per cent of export earnings and 80 per cent of government revenue.”

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