In 2023, Nigeria received the most payments from Shell, totaling $4.92 billion. This was the oil giant’s largest payment to any government, and it included firm income taxes, fees, royalties, and production entitlements from several Nigerian ventures.
This was a $408 million increase over Shell’s $4.52 billion payment to Nigeria in 2022.
Shell’s overall payments to governments in 27 countries amounted to around $29.51 billion in 2023. Following Nigeria, Oman and Norway were the second and third largest receivers, with payments of $4.09 billion and $3.81 billion, respectively.
Shell paid approximately $3.46 billion in production entitlements to Nigeria, $587.64 million in taxes, $727.85 million in royalties, and $146.09 million in fees.
Payment to the government parastatals
The Federal Inland Revenue Service (FIRS), the NNPCL, NUPRC, NDDC, NASENI, and the Nigeria Police Trust Fund all received these contributions on behalf of the federation.
The FIRS collected approximately $587.64 million in Company Income Tax (CIT) from five distinct production-sharing contracts and the Shell Petroleum Development Company of Nigeria Limited.
The Nigeria National Petroleum Company Ltd got the majority of the payment, totaling $3.46 billion in production rights from six production-sharing contracts. The NNPCL received $752.85 million from OPL212/OML118, OPL219/OML135, $864.36 million from EAST ASSETS, and $1.850 billion from WEST ASSET.
The Niger Delta Development Commission (NDDC) was paid approximately $139.99 million in fees, while the National Agency for Science and Engineering Infrastructure (NASENI) received approximately $4.28 million in the same amount.
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) received $727.85 million in royalties and $1.73 million in fees this year.
Shell’s Presence in Nigeria
Shell has been present in Nigeria since the country’s oil exploration began. However, earlier in 2024, the corporation announced a $1.3 billion agreement with Renaissance Consortium to transfer its onshore assets to the organisation, in an effort to exit troublesome onshore operations in Nigeria.
However, communities, civil society organisations (CSOs), and rights groups have strongly opposed Shell’s divestment due to its past of oil disasters and environmental harm. Last month, a right-wing group released a report urging Shell to clean up the Niger Delta before divesting.
The proposed sale of its onshore assets to local operators is subject to approval by Nigeria’s proper regulatory authorities, the NUPRC.