Shell Petroleum Development Company (SPDC), has described crude theft as constituting serious danger to Nigeria’s economic growth, health and environment.
Osagie Okunbor, the Country Chair, Shell Companies in Nigeria (SCiN), in his message in the Nigeria Briefing Notes for 2022 Business Activities, stated oil theft also “poses a serious environmental risk that impacts not just oil and gas operations but also our communities.”
He, however, did not give the volume of crude theft suffered by Shell companies in 2022, in the Briefing Notes, which speaks to different segments of the companies’ operations.
The Shell boss however assured that “Our teams continue to collaborate with the Nigerian government and other stakeholders with the aim of eradicating crude theft from our facilities.”
Expatiating on the impact of the theft, he said: “Last year, we faced our biggest operational challenge in many years at SPDC, where a significant decline in crude receipts at the Bonny Oil and Gas Terminal resulted in our declaration of force majeure in March 2022.
“I am pleased to say that the force majeure on the Bonny export programme was lifted in March 2023.”
He noted that along with other operators in Nigeria, “SPDC continues to face the twin challenges of sabotage and crude oil theft, each of which not only deprives our country and our people of billions of dollars of tax revenue, but also endangers people’s lives.
“Sadly, we were reminded of these dangers in March 2023, when a fire incident occurred at the site of an illegal connection used for crude theft on the Rumuekpe-Nkpoku trunk line in Rivers state. The line was not operational at the time of the fatal incident.”
Crude theft poses a serious environmental risk that impacts not just oil and gas operations but also our communities.
Economic contributions
Despite these losses, Okunbor said: “Shell Companies in Nigeria (SCiN) contribute to economic growth in Nigeria by generating revenue for the government through taxes, creating employment opportunities, and contributing to the development of local businesses.
According to the Briefing Notes, Shell companies made the following contributions:
- $1.36 billion in corporate taxes and royalties paid to the Federal Government of Nigeria (SPDC $450 million and SNEPCo $907 million), compared with $986 million in 2021.
- SPDC, SNEPCo and SNG awarded $1.9 billion contracts to Nigerian-registered companies. Overall, there has been a 138% increase in SCiN’s total value of contracts awarded in 2022 compared to 2021.
- SPDC, in compliance with statutory requirements, paid $59.04 million in 2022 to the Niger Delta Development Commission (NDDC). SNEPCo and its partners, in compliance with statutory requirements, paid $20.73 million to NDDC in 2022.
- SCiN directly employed more than 2,500 people (of whom 97% are Nigerian nationals) with 10,000 contractors supporting operations.
There is cause for optimism, as these collaborations are starting to yield results through changes in approach. Together, we have also made progress in developing security systems that allow us to better monitor our facilities, and therefore detect and deter some of these illegal actions.
Shell Companies in Nigeria (SCiN), comprises four businesses that are wholly owned by Shell plc. They include:
- The Shell Petroleum Development Company of Nigeria Limited (SPDC) produces oil and gas in the Niger Delta;
- Shell Nigeria Exploration and Production Company Limited (SNEPCo) produces oil and gas in the deepwater Gulf of Guinea;
- Shell Nigeria Gas Limited (SNG) as part of the Shell Energy Nigeria (SEN) business line, provides gas to domestic industrial and commercial customers; and,
- Daystar Power provides integrated solar power to commercial and industrial businesses across West Africa. The acquisition of Daystar Power was completed in December 2022.
In addition, Shell Gas B.V. holds a 25.6% shareholding in Nigeria LNG Limited (NLNG), which processes and exports LNG to global markets.
SPDC and SNEPCo also own All On Partnerships for Energy Access Limited (All On), an impact investment company whose purpose is to improve access to energy in Nigeria.
