Oil
We paid FG $44 billion in 4 years – Shell
ABUJA – In spite of the operational challenges faced in the Niger Delta, Shell Petroleum Development Company of Nigeria Ltd (SPDC) paid the sum of $44 billion in royalties and taxes to the Federal Government between 2009 and 2013.
This is part of the company’s contribution to the Nigerian economy in the period under review.
In 2013, SPDC and its subsidiary, Shell Nigeria Exploration and Production (SNEPCO), paid $4.0 billion as their share of royalties and taxes to the Nigerian government (SPDC $2.6 billion, SNEPCO $1.4 billion) to underscore the challenges of doing business.
The two companies also paid $1.5 billion, being value of SPDC and SNEPCO contracts awarded to Nigerian companies in 2013.
The companies’ disbursements to the Niger Delta Development Commission (NDDC) in 2013 amounted to $180.6 million, with SPDC contributing $69.8 million. In terms of community development, the companies also made joint contributions of $104 million, with about $32 million coming from SPDC.
According to the company’s annual sustainable report for 2013, which was presented to the public yesterday, 95 percent of the share of the revenue after costs from each barrel of oil goes to the government.
The report also said the companies have in their employ about 4,000 Nigerians.
Shell is the operator of a joint venture between the government-owned Nigerian National Petroleum Corporation (NNPC 55 percent), Shell (30 percent), Total (10 percent) and Agip (5 percent). It also holds interests in a number of offshore licences, including the Shell-operated Bonga field, where it also has 55 percent equity interest. Shell also has a 25.6 percent interest in Nigeria Liquefied Natural Gas (NLNG), which exports LNG around the world.
Crude oil theft and sabotage continued to affect the company’s operations in the Niger Delta during 2013. This had severe social, economic and environmental implications.
“We are working with our sector, governments, non-governmental organisations and the international community towards ending the theft and sabotage,” the report stated.
“During 2013, production was shut down many times to remove illegal connections to pipelines and make repairs. These shutdowns limit the environmental impact of theft and sabotage along SPDC’s pipeline network. However, it also reduces SPDC’s production leading to lost revenues for SPDC and the Nigerian government,” it said.
On spills, SPDC stated that it continues to improve its infrastructure within this deteriorating security situation, a situation which, it claimed, has led to a reduction in the number of operational spills from its operations, which fell from 37 in 2012 to 30 in 2013. The volume of operational spills from its operations increased to 0.4 thousand tonnes.
“Around 0.3 thousand tonnes of this volume was from a single spill. In 2013, the number of spills caused by sabotage and theft increased to 157, compared to 137 in 2012. However, the volume of oil spilled due to sabotage and theft decreased to 2.2 thousand tonnes. This decrease was due to intensified inspection of facilities, including over-flights,” the report said.
“Operational spills accounted for around 15 percent of the total volume spilled from SPDC facilities in 2013. A key priority for SPDC is to achieve its goal of no operational spills. In 2013, it continued work to maintain and replace pipelines and other infrastructure and, in the past three years, SPDC has replaced around 770 km of pipeline,” it stated.
– BUSINESS DAY
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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