10 April 2018

Nigeria: Shell Pays $4.32b to Govt in 2017 - Report

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Shell

Royal Dutch Shell on Monday published its 2017 Sustainability Report which confirmed that the group's operations in Nigeria paid $4,322,742,582 to the government during the period.

The amount broken down to payment of production entitlement, taxes, royalties, and fees was 18.81 per cent more than the $3,638,241,040 paid in 2016.

The report showed that Shell paid $3,197,530,557 for production entitlement; taxes gulped $765,526,389; royalties got $245,769,306 and $113,916,331 was paid as fees.

Further breakdown of the payments showed that the $3,197,530,557 production entitlement was paid through its partner, the Nigerian National Petroleum Corporation (NNPC); $79,675,241 fees was paid to the Niger Delta Development Commission (NDDC), the Department of Petroleum Resources (DPR) collected the royalties of $245,769,306 and $34,241,090 as fees while the Federal Inland Revenue Service collected $765,526,389 as taxes.

The payments to government in Nigeria were for operations of the Shell Petroleum Development Company (SPDC) in Shallow Water , SPDC West, SPDC East and Production Sharing Contracts (PSC) 1993 (OPL212/OML118, OPL219/OML135) and PSC 1993 (OPL209).

The $4.32 billion payment in Nigeria amounted to about 7.3 per cent of more than $59.1 billion that Shell paid to governments in 29 countries where it had upstream operations in 2017.

In 2017, Shell said it paid $6.3 billion in income taxes and $3.7 billion in government royalties, and collected $49.1 billion in excise duties, sales taxes and similar levies on our fuel and other products on behalf of governments.

However, the report said payments related to refining, natural gas liquefaction or gas-to-liquids activities were excluded as they are not in scope of the UK regulations.

Shell through Shell Gas B.V. owns 25.6% of the Nigeria LNG Limited.

Shell's Chief financial Officer, Jessica Uhl in her comments on the report said revenue transparency provided citizens with important information to hold their government representatives accountable and to advance good governance.

"Shell is committed to transparency as it builds trust. Trust is essential for a company that operates in our line of business, reflecting our core values of honesty, integrity and respect for people," she said.

"By fulfilling the mandatory disclosures in line with the new UK legislative requirements we demonstrate that extraction of natural resources can lead to the opportunity of government revenue, economic growth and social development.

"We do not tolerate the direct or indirect offer, payment, solicitation or acceptance of bribes in any form."

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