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Shell JV contributes $36bn revenue to FG in 5 years

By Hector Igbikiowubo & Clara Nwachukwu
LAGOS—MANAGEMENT of the Shell Petroleum Development Company, SPDC, a joint venture with the Nigerian National Petroleum Corporation, NNPC, yesterday, said it contributed $36 billion, about N5.4 trillion, to government coffers between 2005 and 2009.

The company also debunked media reports placing oil spills in the country, especially in Shell operations in the Niger Delta and those recorded by BP in the United States of America or even the ExxonMobil Valdez spill on the same parallel, noting that nothing could be farther from the truth.

Managing Director of the SPDC and Chairman of Shell Companies in Nigeria, SciN, Mr. Mutiu Sunmonu, made the declaration while presenting the company’s ‘briefing notes’ in Lagos.

He said that the Federal Government received about 95 per cent of the revenues generated after costs might have been deducted from the SPDC operated joint venture.

Sunmonu said: “In 2009, Shell operated joint ventures in Nigeria produced an average 629,000 barrels of oil equivalent per day – about 21 per cent of Nigeria’s estimated total oil and gas production. About 444,000 b/d of this volume came from SPDC operated joint venture, while SNEPCo, another Shell subsidiary, accounted for the balance.”

He added that in the last five years, SNEPCo which operates the company’s offshore business in deepwater had paid almost $3 billion in tax and royalties to the Federal Government.

Sunmonu who disclosed that in 2009 Shell run companies awarded contracts worth almost $892 million to Nigerian companies added that this represented 85 per cent of the total spend for the year.

Although he admitted the company had to lay-off staff two years ago, he said the company had since hired some more staff, noting that as of December 2009, SPDC and SNEPCo employed around 6000 direct employees and contractors.
“Our projects help create tens of thousands more jobs with contractors and in supporting industries,” he noted.
Community development

Sunmonu said the company had taken concrete steps to improve on social investment in the Niger Delta, adding that its contributions grew by 500 per cent over the last five years from about $50 million to almost $250 million.

He added that much of the contribution was done in partnership with the government and the Niger Delta Development Commission, NDDC, stressing: “In 2009, Shell run operations contributed over $156.5 million to the NDDC as required by law. In the same year, operations run by SPDC contributed an additional $57.7 million directly to development projects.”

Shell said it also paid a share of its profits into an education fund for the rehabilitation, restoration and consolidation of education in Nigeria and that it paid about $45 million into the fund in 2009, bringing the total investment in the past 9 years to over $232 million.

Spills  exaggerated

Sunmonu, however, decried media reports placing oil spills recorded in the company’s operations on the same parallel as that recorded by BP in the US Gulf of Mexico, noting  that the flow rate in deepwater and that on land and swamp were quite different.

He disclosed that only only per cent of the oil spill incidents recorded last year resulted from equipment failure, while the remaining 98 per cent were as a result of sabotage and vandalism.

Shell MD noted: “The total number of spills in 2009 was 132, against the average between 2005 and 2009 of 175 per year. Thieves or saboteurs spilled about 103,000 barrels from SPDC facilities in 95 incidents – an average of one spill every four days.”

According to the briefing notes, most of the oil was spilled in two incidents. “At Odidi field in Delta State, thieves trying to steal the oil from the wellhead caused a blow-out that spilled an estimated 78,000 barrels before a specialist well control company was able to bring it under control after 98 days.


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