Shell has revealed that it paid the sum of $1.09 billion in corporate taxes and royalties to the Federal Government in 2023, highlighting its significant financial contribution to Nigeria’s economy.
Shell’s Media Relations Manager, Mrs. Abimbola Essien-Nelson, disclosed this on Tuesday in Lagos based on reports by News Agency of Nigeria
Essien-Nelson highlighted that these payments were made through the operations of two key subsidiaries: the Shell Petroleum Development Company of Nigeria Ltd. (SPDC) and the Shell Nigeria Exploration and Production Company of Nigeria Ltd. (SNEPCo).
According to her, SPDC contributed $442 million, while SNEPCo remitted $649 million, reflecting a substantial fiscal contribution from both entities. Comparatively, in 2022, similar payments from these companies totaled $1.36 billion.
“These payments are Shell exclusive and do not include those made by our partners,” remarked Managing Director and Country Chair, Shell Companies in Nigeria, Osagie Okunbor.
Okunbor reiterated Shell’s dedication to fostering economic development and supporting local businesses, reaffirming the company’s longstanding presence in Nigeria, where it has invested for over six decades.
Recommended reading: Nigeria received highest payment from Shell to governments in 2023 at $4.92 billion
What to know
Essien-Nelson further elaborated that the 2023 Shell briefing notes provide a comprehensive overview of the progress made by various Shell subsidiaries in Nigeria, including SPDC, SNEPCo, Shell Nigeria Gas, and Daystar Power. These reports underscore the companies’ concerted efforts to drive socio-economic development, foster stakeholder collaboration, and provide cost-effective and environmentally friendly energy solutions.
Emphasizing Shell’s ongoing commitment to Nigeria’s energy sector, Okunbor stated, “It is important to emphasize that Shell is not leaving Nigeria and will remain a major partner of the country’s energy sector through its deep-water and integrated gas businesses.” He reiterated the company’s unwavering focus on maintaining safe operations and prioritizing the well-being of its workforce.
Shell’s disclosure of its significant tax and royalty payments reiterates the pivotal role played by multinational corporations in contributing to national revenue and economic development, while also highlighting the complex interplay between corporate interests and governmental fiscal policies.
Backstory
Nairametrics initially reported that in 2023, Shell was a major contributor to Nigeria’s revenue, with the country emerging as the top recipient of payments from the oil giant.
The figures reveal that Nigeria received a substantial sum of approximately $4.92 billion from Shell, encompassing various financial components such as company income taxes, fees, royalties, and production entitlements stemming from diverse projects within the country.
This notable figure represented a significant uptick from the $4.52 billion disbursed to Nigeria by Shell in the preceding year, marking a $408 million increase in payments.
Shell’s financial contributions extended beyond Nigeria, with the company’s total payments to governments across 27 countries reaching approximately $29.51 billion in 2023. Following Nigeria, Oman and Norway emerged as the second and third highest recipients, receiving payments of $4.09 billion and $3.81 billion respectively.
More insights
Shell Plc had reached an agreement to sell its Nigerian onshore oil assets to a local consortium for over $1.3 billion, pending government approval.
Shell’s Integrated Gas and Upstream Director, Zoe Yujnovich, confirmed this in a statement earlier in the year, where he highlighted the significance of the deal, emphasizing the company’s focus on streamlining its portfolio and directing disciplined investments towards deepwater and integrated gas ventures in Nigeria.
This move aligns with Shell’s strategic objective to exit the challenging operating environment i in the Niger Delta region.
Recommended reading: FG offers to expedite approval of Shell, others exit from Nigeria if they pay for oil spill cleanup
