Nigeria emerged as the primary beneficiary of payments from Shell in 2023, securing a staggering $4.92 billion from the oil giant, marking the highest sum disbursed to any government by Shell globally. This significant influx of funds, comprising company income taxes, fees, royalties, and production entitlements, underscores Nigeria’s pivotal role in Shell’s global operations.
According to recent disclosures, Shell’s total payments to governments across 27 countries amounted to approximately $29.51 billion in 2023. Following Nigeria, Oman and Norway ranked as the second and third highest recipients, with payments totaling $4.09 billion and $3.81 billion, respectively.
In the Nigerian context, Shell allocated substantial sums across various sectors, including approximately $3.46 billion for production entitlement, $587.64 million for taxes, $727.85 million for royalties, and $146.09 million for fees.
These payments were disbursed to a range of entities and government agencies on behalf of the federation, with the Federal Inland Revenue Service (FIRS), the Nigeria National Petroleum Company Ltd (NNPCL), and the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) among the beneficiaries.
While the receipt of such substantial payments is welcomed, concerns linger over the environmental and social impact of Shell’s operations in Nigeria. Earlier this year, Shell announced a $1.3 billion deal with the Renaissance Consortium to transfer its onshore assets, signaling a strategic shift away from problematic operations in the country.
However, this move has sparked criticism from communities, Civil Society Groups (CSOs), and rights organizations, citing Shell’s legacy of environmental degradation and oil spills in the Niger Delta region. Calls for comprehensive environmental cleanup efforts in the Niger Delta before divestment have been echoed by various stakeholders.
The proposed sale of onshore assets to local operators is subject to approval from regulatory authorities in Nigeria, particularly the NUPRC, underscoring the importance of regulatory oversight in ensuring transparency and accountability in the energy sector.
Credit: Nairametrics (Text Excluding Headline)
