…States reasons why it is not leaving Nigeria
Olusola Bello
Shell Companies in Nigeria say they have a track record of strong production and financial performance and that their performance matches five-year average despite COVID 19.
According to the organisation, 2019 was a record year and 2020 remained strong despite the global health pandemic.
It stated: “This outcome is thanks to the deeply embedded culture of performance and empowering leaders to make faster decisions and find fit for purpose solutions.”
Production in Nigeria according to Shell Companies in Nigeria (SCIN) Briefing Notes 2021 was hit by the pandemic and OPEC quota reductions imposed in response to the global economic slowdown.
Output from the Shell Petroleum Development joint venture and Shell Exploration and Production Company (SNEPCO) in 2020 fell from the record high of 2019 but, at around 620,000 barrels of oil equivalent per day, it, however, remained close to the five average of 625,000. But this has not shaken the company’s confidence in the Nigerian operating environment.
Shell stated that it is enhancing its portfolio of assets through selective investment in large gas projects, explorations in the Gulf of Guinea and rejuvenation of the SPDC onshore oil and gas production in the Niger Delta by reopening wells
“The SPDC JV and SNEPCO production oil and gas have increased over the past five years and Shell Nigeria (SNG) added another 30 industrial customers to its books. Shell Gas BV and its partners took the decision to expand NLNG’s liquefied natural gas export operations in Nigeria at the end of 2019”
The company stated that taking these decisions further reaffirm that shell is in Nigeria for the long haul.
It said people should not think because it is divesting some of its onshore assets, it is going to leave Nigeria. “Shell has stakes in 19 oil mining leases (OMLs) under the SPDC joint venture (JV) in Nigeria’s onshore oil and gas, in which it expects to rake in a couple of billions of dollars from their sale.”
The company also highlighted the huge contribution it is making to the Nigerian economy through taxes and royalties. For instance, it paid about $4.6billion in taxes and royalties to the Federal Government in 2019 and another $2.8billion to the Niger Delta Development Commission (NDDC) from the year 2000 to date.
Igo Weli, the Country Head/Corporate Relations Director, Shell Petroleum Development Company (SPDC), in an interactive session with journalists in Lagos, said the energy company is merely reviewing its operations in line with current operating realities.
He reaffirmed the commitment of his company to Nigeria when he said: “There is no way we are going to leave Nigeria. The economics of the environment, timing and structure is what we are looking at.”
He said it is increasingly challenging for Shell to retain its onshore oil and gas assets given the associated risks.
He said: “There is no way we are going to leave Nigeria. The economics of the environment, timing and structure are what we are looking at.
“We are reviewing our operations and looking at our upstream and deepwater assets to strengthen our presence there.”
This follows the renewal of the OML 118 production sharing contract (PSC) for another 20 years. The field hosts the Bonga deepwater project.
There is also the final investment decision (FID) on NLNG Train 7, which he said is huge on local content development and will add great value to Nigeria’s oil and gas sector and the economy at large.
He also dispelled the rumours that Shell was stuck with the onshore assets on offer due to pending litigations, and paucity of funds due to lack of support by international financiers on growing environmental concerns.
According to him, the commercial details are still being worked out at the highest level and awaiting regulatory approval.
