Shell rakes in $4bn from Nigeria in one year

Royal Dutch Shell earned more than $4 billion from oil and gas production in Nigeria in 2017; about seven per cent of its total global output. Reuters, which reported this yesterday, noted that though Shell does not break down profits by country, “but a report on payments to governments that the company publishes annually showed it paid around $1.1 billion in royalties, taxes and fees” to the Nigerian government in 2017.

“That means Shell earned more than $4 billion from oil and gas production in Nigeria in 2017 – around 7 per cent of its total global output,” the report entitled; “In Nigeria, Shell’s onshore roots still run deep,” read.

The report quoted the Country Chair of Shell Companies in Nigeria, Osagie Okunbor, to have foreclosed shut down of onshore operations by the company in Nigeria. “So while Shell Petroleum Development Company (SPDC) has cut oil production in the Delta by 70 per cent since 2011, when it first started reporting data on spills, the incidence of spills and theft from pipelines has fallen at a much lower rate and has picked up again recently,” the Reuters data shows.

While Shell has cut onshore oil production and sold some onshore assets, it continues to invest in others. In fact, onshore production has risen in recent years as a share of Shell’s output in Nigeria, an analysis of company data over the past decade shows Much of the increase comes from less polluting gas, used mainly in power generation, which Shell thinks will be key to the transition to lower carbon energy.

Gas made up 70 per cent of onshore production in 2017, up from 47 per cent in 2008. The company still controls thousands of kilometres of pipelines connecting inland fields to coastal terminals through its subsidiary, Shell Petroleum Development Co of Nigeria (SPDC). So far this year, 85 crude spills have been recorded, already higher than the previous two years.

In 2016, militant attacks pushed the volume of spills to more than 30,000 barrels, a high since 2011.Oil theft from SPDC rose to around 9,000 barrels per day (bpd) in 2017 – a loss of nearly $180 million for the year – from 6,000 bpd the year before. Despite all the problems and costs, however, Nigerian onshore operations generate billions of dollars annually.

A Shell spokesman declined to comment on the specifics of Reuters’ data analysis. The Nigerian Petroleum Ministry declined to comment. Shell has shown it can shut down if it is not making money. It stopped producing oil completely in Iraq last year after half a century in the country, although it retains substantial gas operations.