Nigeria: Shell Pays State Oil Company $2.172 Billion Production Entitlements


Yemisi Izuora

Royal Dutch Shell Plc, said its operations would be guided by the high level of transparency as a means of building trust, revealing that it paid $2.172 billion to the Nigerian National Petroleum Corporation, NNPC, as Production entitlements.

In its ‘Report on Payments to Governments for the Year 2016’ where it revealed payment of $3.638 billion to the Nigerian government last year for its oil and gas exploration activities in the country, the company said Nigeria’s revenue was the highest out of the 31 countries to which Shell made payments last year.

It said it paid $2.172 billion to the Nigerian National Petroleum Corporation, NNPC, as production entitlement.

The oil major said $1.18 billion was paid to the Federal Inland Revenue Service as taxes, $160.71 million and $239,189 to the Department of Petroleum Resources, DPR, as royalties and fees, respectively, and $125.14 million to the Niger Delta Development Commission, NDDC, as fees.

The company stated: “Tax binds governments, communities and businesses together. Revenue transparency provides citizens with important information to hold their government representatives accountable and to advance good governance. Shell is committed to transparency as it builds trust. Trust is essential for a company that operates in our line of business, reflecting our core values of honesty, integrity and respect for people.

“By fulfilling the mandatory disclosures in line with the new UK legislative requirements, we demonstrate that extraction of natural resources can lead to the opportunity of government revenue, economic growth and social development.

“We do not tolerate the direct or indirect offer, payment, solicitation or acceptance of bribes in any form.”

Apart from Nigeria, Shell paid a total of $2.67 billion to Malaysia, the second biggest recipient of revenue from the company, according to the report.

Shell said it paid $2.53 billion, $1.61 billion and $1.07 billion to Norway, Iraq and Oman, respectively last year.

It stated that it paid more than $55.6 billion in 2016 to governments of Qatar, India, the United Kingdom, the United States and Brazil.

The report, which was prepared in accordance with the UK’s Reports on Payments to Governments Regulations, 2014 (as amended in December 2015), is the second issued by Shell under such regulations.

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