The Shell Petroleum Development Company of Nigeria Limited (SPDC) in its recently released 2014 sustainability report revealed that it paid $48 billion (N9.6 trillion) revenues to the Nigerian government from 2010 to 2014.
Also, the company paid $3 billion (N600 billion) share of royalties and taxes to the government in 2014, with $1.8 billion from SPDC and $1.2 billion from Shell Nigeria Exploration and Production Company (SNEPCo) in the year under review.
Shell stated that 95 per cent share of revenue after cost went to the Nigerian government from each barrel of oil that SPDC produces; and added that 90 per cent of total number of contracts was awarded to local companies in Nigeria.
The report disclosed that the company spent $1.5 billion on local contracting and procurement in 2014. “About 95 per cent proportion of employees at SPDC and SNEPCo are Nigerians. SPDC and SNEPCo’s contribution to the Niger Delta Development Commission in 2014 was $202 million with $93.6 million, coming from Shell,” the report added.
The company said that it has reduced the volume of flared gas by more than 75 per cent between 2002 and 2013. “Flaring intensity (the amount of gas flared per barrel of oil produced) fell by almost 60 per cent over the same period,” it said.
According to the organisation, SPDC remains committed to further reducing the volume and intensity of gas flaring with a number of associated gas-gathering projects which are all currently in development. It added that further progress to reduce flaring needs sustained commitment.
“In 2014, an increase in levels of oil production has resulted in the volume of flared gas increasing by 12 per cent over the year, and an increase of nine per cent in flaring intensity. A challenging operating environment and shortfalls in funding from the government-owned Nigerian National Petroleum Company have resulted in delays to the completion of a number of gas-gathering projects,” the company said.
Shell disclosed that theft and sabotage were the cause of 75 per cent of spills from the SPDC JV pipelines in 2014. While maintaining there were 139 spills as a result of recorded theft and sabotage incidents over the year, compared with 157 in 2013.
“However, there has been a 42 per cent reduction in theft related production shutdowns, in part reflecting improvements to SPDC’s response procedures, such as removing multiple theft points during a single response operation. A key priority for Shell globally is to achieve the goal of no operational spills. Regrettably, in 2014 there were 37 operational spills from the SPDC JV network, with 0.3 thousand tonnes of spill volume. This compares to 30 operational incidents and 0.4 thousand tonnes of spill volume in 2013.
“To reduce the number of operational spills, the SPDC JV continues to work to maintain and replace sections of pipeline and other infrastructure, installing 132 km of new pipeline during the year.
“There was further progress on clean-up of the 303 spill sites identified at the beginning of 2014, 194 (64 per cent) had been remediated and independently certified by the end of the year. More than half of the backlog was in Ogoniland where 125 additional sites were identified in 2013 after years of restricted access to the region,” Shell said.
Mutiu Sunmonu, who retired in February, said that crude oil theft has been the defining sustainability challenge during his time as chairman.
He said that the SPDC has taken numerous measures to limit the impact of this criminality within its areas of operation. “It has also raised awareness of the scale of the problem both within Nigeria and internationally. However, theft, sabotage and illegal refining continue to be the main source of environmental damage in the Niger Delta today and result in many thousands of barrels of lost production. It is vital that the current collaboration between operating companies, communities, the Nigerian government and its international partners is maintained and expanded,” he added.
Sunmonu pointed out that onshore oil divestments by SPDC have created a perception with some that Shell is leaving Nigeria. “In fact, Shell companies remain committed to maintaining the pioneering role we have played in Nigeria for more than half a century,” he said.

Maureen Nzeogu
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