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Shell says it paid Nigeria $3.8 bil tax on offshore oil operation in 5 years

Lagos (Platts)–21Apr2011/820 am EDT/1220 GMT

Royal Dutch Shell Nigeria says it paid about $3.8 billion in taxes and royalties to the Nigerian government from its offshore and deepwater oil operations between 2006 and 2010.

In a briefing note on the company’s operations in Nigeria in 2010 published Thursday, Shell said its joint venture operations contributed about $31 billion in revenue to Nigeria during the same period.

Shell, however, said its oil production in the West African country, particularly from the onshore fields, continued to decline because of the activities of thieves who damage production facilities.

Barges take stolen oil to tankers waiting offshore for export, Shell said. There is also a massive illegal refining business based on stolen crude oil. All this has reduced the amount of oil SPDC (Shell) is producing, the company said.

“These continue to be challenging times in Nigeria. We are faced with many issues that impact our onshore production and increase our direct costs while impacting on the environment and the livelihoods of the people who live in the oil producing region,” Shell in-country chairman Mutiu Sunmonu said.

In 2009, Shell began selling off its stakes in Niger Delta onshore oil blocks and has sold five to date.

About 100,000 barrels of crude are estimated to be stolen from Nigeria’s Niger Delta every day or 4% of the country’s oil output.

Much of the oil is stolen by heavily armed and well-organized groups who drill into pipelines or hijack barges laden with crude.

Nigerian security agencies in 2010 alone arrested 187 people and seized 20 tankers, 28 barges and 38 other boats used in transporting stolen crude, Shell said.

Shell also said that it had halved gas flaring in its oil fields in the Niger Delta over the past few years to 0.3 Bcf/d from over 0.6 Bcf/d, and that it was collaborating with Nigeria and the World Bank to finally end the flaring, which is a health hazard to nearby communities and contributes to global warming.

–Staff, [email protected]

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