Shell’s $4.92 Billion Payment Tops List in Nigeria, Raises Questions Over Social and Environmental Impact

In 2023, Nigeria emerged as the leading beneficiary of payments from Shell, receiving a substantial sum of approximately $4.92 billion. This amount, comprising company income taxes, fees, royalties, and production entitlements from various projects within Nigeria, marked a significant increase from the $4.52 billion paid in 2022.

Shell’s total payments to governments worldwide amounted to approximately $29.51 billion in 2023. Following Nigeria, Oman and Norway were the second and third highest recipients, with payments of $4.09 billion and $3.81 billion respectively.

For Nigeria, Shell’s payments included around $3.46 billion in production entitlement, $587.64 million in taxes, $727.85 million in royalties, and $146.09 million in fees.

The entities or government agencies receiving these payments on behalf of the federation included the Federal Inland Revenue Service (FIRS), the Nigeria National Petroleum Company Ltd (NNPCL), the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Niger Delta Development Commission (NDDC), the National Agency for Science and Engineering Infrastructure (NASENI), and the Nigeria Police Trust Fund.

Despite its long-standing presence in Nigeria dating back to the beginning of oil exploration in the country, Shell recently announced a $1.3 billion deal with the Renaissance Consortium to transfer its onshore assets. This move, aimed at divesting from problematic onshore operations, has faced criticism from communities, Civil Society Groups (CSOs), and rights groups over environmental concerns and the legacy of oil spills in the Niger Delta.

A recent report by a rights group called on Shell to clean up the Niger Delta before divesting its onshore assets. The proposed sales of these assets to local operators are subject to approval from the NUPRC, the appropriate regulatory authority in Nigeria.

Nairametrics