Nigeria has regained its position as the biggest recipient of payments from Shell as production entitlement, royalties, taxes and fees to the government in 2023 amounted to $4.92 billion, the highest in four years.
The payout to Nigeria increased by 8.85 percent compared to the previous year, representing 16.67 percent of the company’s total payments to 26 countries, new data released by Shell shows.
Africa’s largest oil producer lost the top position in 2021, when Norway received the largest amount of about $4.52 billion compared to the $4.48 billion paid to the West African country.
In 2022, Nigeria dropped further to the third-biggest recipient of payments from the British oil giant, although the amount paid to it rose by 0.92 percent to $4.52 billion. The company’s payment to the country hit a high of $6.39 billion in 2018 but fell to $5.63 billion in 2019 and $3.24 billion in 2020.
Shell’s payments to countries where it has operations declined 14.11 percent year-on-year to $29.52 billion last year as its annual profit dropped 30 percent compared to its highest-ever earnings of $39.9 billion notched in 2022.
It said in its latest report that payments made to governments arose “from activities involving the exploration, prospection, discovery, development and extraction of minerals, oil and natural gas deposits or other materials (extractive activities)”.
Its subsidiaries in Nigeria paid $3.46 billion to the Nigerian National Petroleum Company (NNPC) last year as production entitlement, while $587.64 million was paid in taxes to the Federal Inland Revenue Service.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was paid about $727.85 million and $1.73 million for royalties and fees respectively, while $139.99 million was remitted to the Niger Delta Development Commission.
Shell paid fees amounting to $4.28 million and $85,890 to the National Agency for Science and Engineering Infrastructure and Nigeria Police Trust Fund respectively.
Shell’s payments to the Nigerian governments look set to drop this year following its decision to sell its onshore business in the country.
The company announced on January 16 that it had agreed to sell its Nigerian onshore subsidiary, Shell Petroleum Development Company of Nigeria Limited (SPDC), to Renaissance, a consortium of five companies consisting of ND Western, Aradel Energy, First E&P, Waltersmith and Petrolin.
Source- Business Day Newspapers.