#Shell #Nigeria: Unlocking Nigeria’s economic potential, improving lives Ruth Olurounbi Shell Companies in Nigeria (SCiN), on December 10, 2014, organised a three-hour between their Communications Managers and Nigeria’s “Online Influencers” to familiarise them with the companies’ activities. RUTH OLUROUNBI, who was there, brings the report. “Oil and gas: the backbone of growth” Despite the claim in some quarters that Nigeria’s oil is drying up, as they called for diversification from the sector more environment friendly ones, oil majors in the country have consistently said that oil and gas will provide a backbone for growth for the foreseeable future. In the views of Shell Comapanies in Nigeria (SCiN), gas is crucial to the driving progress in other industries. On this premise, the companies believe Nigerian oil and gas has huge scope, an economic imperative and political mandate to grow. Although the oil and gas industry landscape in the country is continually evolving, according to SCiN, there are still many uncertainties. The current global fall in oil prices nails SCiN’s statement right on the head. While the federal government is seeking to reform governance of the industry through the Petroleum Industry Bill (#PIB), which suggests that the terms under which International Oil Companies (#IOCs) operate may change, still two things remain as sure as the dawn: the potential for growth in oil and gas industry is becoming exponential and, driving this growth requires partnership between the government and companies with the ability to innovate, the capacity to deliver major projects and long-term commitment to Nigeria On this strategic partnership, Shell believes it can deliver, given its history in Nigeria. More so, since it has played a pioneering role in Nigeria’s oil and gas industry and the act that SCiN have been at the forefront of gas development and utilisation in Nigeria, producing and delivering gas to domestic consumers and export markets for 40 years. Economic contribution to Nigeria With an average daily production of oil 693,000 barrels by Shell-operated ventures in 2013, 95 per cent of revenue after costs from the Shell Petroleum Development of Nigeria Limited (#SDPC) joint venture going to the Federal Government and 91 per cent of SCiN contracts going to Nigerian companies, the companies say they have been among the main driving forces of growth in the nation’s energy and related sectors. Also, according to Shell, the SPDC and hell Nigeria Exploration and Production Company of Nigeria Limited (#SNEPCo), in 2013, supplied about 15 per cent of the country’s domestic gas, most of which was used for power generation. SDPC’s Afam VI power plant, Shell added, supplied 14-20 per cent of the country’s electricity. As far as human capital development is concerned, Shell Nigeria boasts of a big number of 30 to 40,000 employees and contractors typically employed by Shell in Nigeria (SCiN) at any one time and 4,000 direct employers of SPDC and SNEPCo which constitute 95 per cent. Philip Mshelbila, General Manager, Communications, told the audience that the #SPDCJV (Shell Petroleum Development of Nigeria Limited joint venture) has contributed about $44 billion to the government in the past five years (2009-2013). “The Federal Government receives about 95 per cent of the revenue after cost from the SPDCJV, including income from its majority shareholding via the state-owned energy company, #NNPC.” SNEPCo, which operates in deep water, has contributed in excess of $26 billion to the government in the last five years, Mshelbila said. Still justifying its contribution to the country’s economy, Mshelbila said the operations of the SCiN have importantly and directly impacted the economy, more so that in 2013 alone, contracts worth $1.5 billion were awarded to Nigerian companies, which represented 91 per cent of the total number of contracts awarded in that year. “The use of locally manufactured goods and Nigerian service companies in several areas has created tens of thousands of jobs for worker in communities which we operate. As of December 2013, SPDC and SNEPCo directly employed around 4,000 people, almost 95 per cent of whom are Nigerians,” Mshelbila said. With regards to its social investment initiatives, the SCiN has, in 2013, according its Mshelbila, contributed $180 million to the Niger Development Commission (NDDC), in addition to taxes and royalties paid to the Federal Government. “Separately, more than $100 million was spent by the SDPC JV and SNEPCo on voluntary social investment activities, of which the Shell share was $32.3 million. This makes Nigeria the largest recipient of social investment by Shell group globally,” a report by the companies revealed. Mshelbila said the company also pays a share of its profit into a Federal Government education fund, saying that in 2013, SPDC and SNEPCo paid about $177 million into the fund, bringing the total investment in the past five years (2009-2013) to $703 million. Ogoni and Shell’s restorative efforts Following the United Nations Environment Programme (UNEP) report of its Environmental Assessment of Ogoniland published on August 4, 2011, which significantly highlighted environmental impacts from oil pollutions in parts the area, following oil spillage, crude oil thefts and illegal oil refining, among others, Shell said it has taken action on all the UNEP recommendations “directed specifically to it.” Mshebila assured that “all of the 15 sites identified in the report have been remediated and certified by regulators where further remediation was required.” He, however, lamented that there has been re-contamination from pipeline sabotage and oil theft in some cases. He said though, that SPDC has completed an inventory and physical verification of assets in Ogoniland for decommissioning purposes. Safety The SDPC, Mshebila said, has delivered substantial reductions in gas flaring over the last decade and is committed to reducing it further to acceptable international standards. According to him, SPDC has reduced flaring volume from its facilities by about 75 per cent between 2003 and 2012. Mshebila said the company had a challenge in reducing gas flaring in 2013 due to joint venture funding challenges which resulted in delays to some gas-flaring projects. Two of these projects, which are expected to gather an additional 35 per cent of associated gas by 2014 and 2015 are likely to be delayed, Mshebila said. “In spite of these challenges, the overall trend in associated gas gathering and flaring reduction is positive and SPDC has a work plan in place to drive further reductions,” while also “continuing to work closely with its joint venture partners and other stakeholders o minimise delays to the key projects on which further flare reduction depends,” he added.
Posted on: Sat, 20 Dec 2014 08:04:05 +0000
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