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Shell says Nigeria payments and oil theft climb in 2017

Reuters Staff: APRIL 9, 2018 / 1:41 PM

LONDON, April 9 (Reuters) –

* Shell’s payments to the Nigerian government grew to $4.32 billion in 2017, up nearly 19 percent from $3.64 billion in 2016, according to its annual sustainability report released on Monday

* The bulk of the payments, $3.197 billion, went to state oil company NNPC for production entitlement 

* Crude oil theft from pipelines of Shell’s Nigerian subsidiary SPDC increased by some 50 percent, rising to roughly 9,000 barrels per day (bpd) in 2017 from 6,000 bpd in 2016, the report said.

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One Comment

  1. Zik Gbemre, JP. says:


    The way we are often inundated over the past years with catchy headlines of news both in print and electronic media, of millions, billions and trillions of Naira and Dollars channeled into and expended by various Nigerian Governments and their agencies across the nation, one would have thought that by now, the living standard of the average Nigerian and the access to basic human and infrastructural needs would have greatly improved like the ones in developed societies of Europe and America. Sadly, that has not been case. Rather, the often ‘big figures’ seem only to be benefitting those concerned in government and their agencies, while the living standard of the Nigerian common masses, especially those in the Niger Delta region which is the goose that lays the golden eggs, have continued to get worse by the day.

    This was our mindset, when it was recently reported that the Royal Dutch Shell had paid a total of $4,322,742,582 (about N1.5 trillion) to the Nigerian government in 2017 alone, according to its annual payments report. The big question we could not help but ask, where did all that money go to? What was it used for by the Nigerian government? How come there has been no significant improvement in the life and living conditions of the people of the Niger Delta, within the same period the said money was paid?
    The amount is broken down as $3,197,530,557 for production entitlement, $765,526,389 in taxes, $245,769,306 in royalties and $113,916,331 in fees. By comparison, Nigeria earned a total revenue of N10.6 trillion in 2017 from both oil and non-oil sources, according to the central Bank of Nigeria (CBN) Economic Report, meaning Shell alone contributed about 15 per cent to the country’s income.

    The striking part in all of this is the fact that the total paid to Nigeria by Shell is the highest to any country where the international oil company operates. The closest country to Nigeria is Malaysia, which received $4,153,062,216, followed by Norway with $3,425,577,190; Iraq, $3,390,644,228; and Brazil, $1,569,519,784. A further breakdown showed that Shell paid $3,197,530,557 to the Nigerian National Petroleum Corporation, NNPC; $79,675,241 to Niger Delta Development Commission, NDDC; $280,010,396 to Department of Petroleum Resources, DPR; and $765,526,389 to Federal Inland Revenue Service, FIRS. The total payments made to 29 governments come to $22,408,521,077, 20 percent of which came to Nigeria. This could also mean Shell makes a fifth of its global income from Nigeria.
    Any sane and reasonable person would see that the amount of money paid by Shell alone to the Nigeria Government and its agencies, is enough to steer the Nigerian economy and the state of the Niger Delta region, in the right direction of astronomical growth that would benefit all and sundry. Let us also bear in mind that the said amount, which was for only 2017, came from only Shell as an International Oil Company (IOC) operating in the country. We can then imagine how much money other IOCs like Chevron-Texaco, Eni-Agip, Exon-Mobile, etc., as well as Indigenous Oil Companies, must have been paying yearly to the Nigerian government and its agencies. What are they doing with all these payments coming from IOCs/Indigenous Oil and Gas Companies into the coffers of government and their agencies?

    When we consider the fact that major IOCs like the Shell (SPDC) has been contributing three percent of its annual budget to the Niger Delta Development Commission (NDDC) as part of its Social Responsibilities toward the development of the Niger Delta region, then we would understand the enormity of the atrocities being committed here against the people of the Niger Delta region, whose farmlands, rivers/streams, swamps are daily destroyed by oil and gas exploration and production. Yet, the people of the region have not come close to even being the right path of development. All we have had, in the over 17 years of the NDDC existence for instance, is the reported avalanche of ‘abandoned projects’ and ‘absolute wastes and pilfering of allocated funds by the NDDC throughout these years across the nine benefitting States of the region.

    This, to us, is not only a ‘national tragedy’ that urgently needs to be addressed, but it clearly paints a very bad picture of the Nigerian government and their agencies as mere outlets of corruption in high places. There is therefore need for more accountability, transparency and commitment by both the Nigerian Government and their various agencies mentioned here, in the management of the enormous amounts of funds that comes to them from IOCs and other oil companies operating in the country. The Niger Delta people, whose natural means of livelihood have been destroyed by the extractive industry, and the goose that lays the golden eggs which feeds the nation’s economy; needs to start reaping, benefitting and enjoying more from the oil and gas operations in the country. We cannot be having reports of such enormous amounts of money paid by IOCs to the Nigerian Government and their agencies, yet there have been no single improvement or positive change in the lives of the people whose natural resources yielded the said funds in the first place.

    The hardship, suffering and poverty evident in the Niger Delta region has pushed some persons into illegitimate businesses like illegal bunkering and illegal refineries that are daily destroying the region’s ecosystem and also costing the nation a lot. Agreed that it is absolutely wrong for host communities’ locals in the region to destroy their own natural environment just to cause spillage that will bring in spill clean-up/remediation contracts for them, but there is expedient need for the Nigerian government at the State and Federal levels to invest more in the areas of infrastructure and human capital development, especially in the rural areas of the region. So as to reduce the incidents of some of these illegal businesses and cases of economic sabotage – which adversely affects the natural environment. The sad part is that when the opportunities for development are there, it is the same politicians in power and their fronts that will hijack these opportunities, thereby denying the locals form having a taste, which of course is due to lack of accountability, transparency and insincerity on the part of the implementors. The Nigerian government and the oil and gas companies also encourage this trend by deliberately using some irresponsible officials to disrupt the process from going as intended. The truth is that if the Nigerian Government and the oil and gas companies are sincere, they know exactly what and what to do so that the host communities, who often at the receiving end of everything wrong in the extractive industry, will benefit more from their operations. But they would rather pretend about it by using the wrong strategies and wrong officials which are often not to the benefit of the locals. Those in relevant authorities, be it in government and within the oil companies, do not like honest and sincere persons in their system as well, hence everything in the extractive industry is going from bad to worse.

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