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  • Nigeria gets $3.017b from Shell

    ANGLO–Dutch oil giant Shell  said its subsidiaries in  Nigeria paid the Federal Government $3.017 billion as income taxes and royalties last year.

    In its 2014 Sustainability Report, the company said it paid the government $2.290 billion income taxes and $727 million as royalties.

    Its Chief Financial Officer, Simon Henry, said the company knows the importance of taxes to the governments where it operates.

    He said: “We provide the authorities with timely and comprehensive information on potential tax issues, while we receive treatment that is open, impartial, proportionate, responsive and grounded in an understanding of our commercial environment. Not only does this approach help us to comply with both the letter and the spirit of the laws where we have our operations, it also improves transparency about our tax affairs and allows Shell to better manage its tax-related risks throughout the life cycle of each project.

    “At Shell, we understand how tax binds governments, civil society and businesses together. We use legitimate tax incentives and exemptions designed by governments to promote investment, employment and economic growth. But we oppose tax fraud and tax evasion. For transparency reasons, Shell reports all its significant subsidiaries.

    “At Shell, we have a zero tolerance policy on corruption and bribery. “They disrupt societies, they disrupt the level playing field among companies, and they threaten the viability of the long-term investments that characterise our industry. We do not tolerate the direct or indirect offer, payment, solicitation or acceptance of bribes in any form. Facilitation payments are prohibited. Our Code of Conduct include specific instructions to staff and mandatory training, especially with respect to potential conflicts of interest and the offer or acceptance of gifts and hospitality. A Global Helpline allows employees and business partners to seek advice and report any violations. In addition, Shell sits on Transparency International‘s Steering Committee for the Business Principles for Countering Bribery.

    “Our anti-bribery commitment is an integral part of the Shell General Business Principles, first published in 1976. So is our stance against political donations, which precludes Shell from making payments to political parties, organisations or their representatives.

    “In today’s fast-changing world, where energy plays a vital role, Shell is active as a constructive and responsible partner in public policy making, from advocating the implementation of effective carbon pricing to the protection of our ships against piracy. In all these endeavours, we favour a multi-stakeholder approach, working with others inside and outside our industry to achieve practical and effective solutions, beneficial to all parties involved.

    “Tax binds governments, communities and businesses together. Revenue transparency provides citizens with an important tool to hold their government representatives accountable and to advance good governance. Shell is committed to transparency as it builds trust. Trust is essential for a company that operates in our line of business, reflecting our core values of honesty, integrity and respect for people.”

     

     

  • Shell rakes in $2.437b from two oil blocks sale

    Shell rakes in $2.437b from two oil blocks sale

    The Shell Petroleum Development Company of Nigeria Limited (SPDC) and other joint venture firms, Total Exploration and Production (E&P) Nigeria Limited and Nigerian Agip Oil Company Limited have realised $2.437 billion from sale of their interests in two oil blocks – oil mining lease (OML) 18 and OML 29 and the Nembe Creek Trunk Line (NCTL) and related facilities in the Eastern Niger Delta.

    The companies completed sale of their interests in assets last week bringing an end to the controversies that trailed the transaction since last year. The transaction on the two assets ought to have closed since last year alongside other two blocks OMLs  24, 25, but because OMLs 18 and 29 were considered juicy when compared to others and besides there were issues of capacity and capability on the side of the preferred bidders, the transaction lingered till last week.

    According to SPDC’s Corporate Media Relations Manager Precious Okolobo, Shell’s interests in OML 18 were assigned to Eroton Exploration & Production Company Limited and total cash proceeds for Shell amount to $737 million while OML 29 and the NCTL were sold to Aiteo Eastern Exploration and Production (E&P) Company Limited and total cash proceeds for Shell amount to some $1.7 billion.

    This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government’s aim of developing Nigerian companies in the country’s upstream oil and gas business, he added.

    Shell, he said, has been in Nigeria for more than 50 years and remains committed to keeping a long-term presence there – both onshore and offshore. Through SPDC and its other Nigerian companies, Shell responsibly produces the oil and gas needed to help fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

    OML18 covers an area of 1,035 square kilometres and includes the Alakiri, Cawthorne Channel, Krakama, and Buguma Creek fields and related facilities. The divested infrastructure includes flow stations together with associated gas infrastructure plus oil and gas pipelines within the OML. The divested fields produced on average of about 14,000 barrels of oil equivalent per day in 2014.

    OML29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities. The NCTL is 100 kilometres long and has a capacity of 600 thousand barrels per day. It was commissioned in 2010 and evacuates crude to the Bonny Crude Oil Terminal (BCOT). BCOT is not part of the transaction and will remain owned and operated by the SPDC Joint Venture. The divested infrastructure includes flowstations together with associated gas infrastructure plus oil and gas pipelines within the OML. The divested fields produced around 43,000 barrels of oil equivalent per day (100 per cent) in 2014.

    Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited have also assigned their interests of 10 per cent and 5 per cent respectively in the lease, ultimately giving Eroton Consortium a 45 per cent interest in OML 18 and also assigned the same interests to Aiteo Eastern E&P Company Limited ultimately giving it a 45 per cent interest in OML 29 and the Nembe Creek Trunk Line.

    Shell said all approvals have been received from the relevant authorities.

    Royal Dutch Shell Plc had said it targets $15 billion from assets sales between last year and this year. The divestments of the assets are part of the steps to achieve the target.

    Shell Chief Executive Officer Ben Van Beurden had said the company had already completed about $8 billion in asset sales and announced plans to dispose of about $15 billion through 2015 adding that the company agreed to sell two natural gas assets in the United States for $2.1 billion plus shale acreage.

    Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, said last year that the value of divested assets by the International Oil Companies (IOCs) including Shell, Chevron, Total and Agip from onshore, shallow water and offshore terrains, would hit about $11.5 billion by the end of last year. She said before the end of last year, at least 20 oil blocks with reserves of not less than four billion barrels of oil equivalent (boe) would have been divested by the multinational oil firms.

  • Shell shuts flow stations in Delta, Bayelsa over threats from militants

    Shell shuts flow stations in Delta, Bayelsa over threats from militants

    Last Saturday’s electoral victory by Gen. Muhammadu Buhari of the All Progressives’ Congress (APC), may have started generating ethnic heat as some suspected militants may have forced oil giant, Shell Petroleum Development Company (SPDC) to shut some of its flow stations in Delta and Bayelsa states.

    Although SPDC denied the report, as its spokesmen  said the company would not comment on security issues, community sources told the Nation yesterday evening that militants had already warned the company through threat messages, adding that the new threat had everything to so with the failure of President Jonathan at the polls.

    A source in one of the communities in Burutu council area of Delta state told the Nation that there were feelers that the oil company had commenced the shut down of its flow stations in response to the threat.

    “From the reliable information that I have, militants have sent a warning to Shell to park up their operations in the area if they don’t want to be attacked and the reason is because President Jonathan has lost the election.

    “So from what I have gathered, Shell has closed her flow station at Tunu, Benisede and Kussu. These flow stations are situated between Burutu local government area in Delta, Ekeremor and Southern Ijaw in Bayelsa state”, source said.

    But the SPDC has denied the report indicating that it had shut down its flow stations as a result of threats from militants, saying it would not comment on security issues when asked if it ever received any threat to park up.

    Company spokesperson, Joseph Obari, in a brief message to the Nation correspondent in Warri said “our operations are continuing and we will not comment on security issues”.

    Tompolo, in a statement by his spokesman, Paul Bebenimibo yesterday in Warri appealed to youths in the region to desist from violence as only peace can bring about national development.

    Tompolo’s statement reads: “I want to appeal to all our people to be orderly, calm and embrace peace. The will of the people is sacrosanct and the existing peace be maintained.

    “I believe that nothing can happen if God does not approve of it. Peace is a prerequisite for national development. People should remain calm also during the governorship election”, he said.

  • Shell, ENI responsible for 550 oil spills in Nigeria last year

    Shell, ENI responsible for 550 oil spills in Nigeria last year

    Late last year, it came to light that Shell had been warned repeatedly by its own staff that the Trans Niger Pipeline was at significant risk of failure well before a 2008 spill of 500,000 barrels of oil. It was also revealed that Shell had drastically understated the extent of the spill.

    These revelations were made during the proceedings of a lawsuit brought by a group of 15,000 Nigerians over a second spill from the same pipeline and helped lead to a much heftier payment by the company to the Bodo community in the Niger Delta in compensation for the impacts of both spills.

    It would appear that the company has still not managed to correct whatever problems are leading to its poor safety and environmental performance in Nigeria, however, as Shell was responsible for more than 200 oil spills in the country last year alone, according to a new report by Amnesty International.

    As horrible as Shell’s record is, Italian oil giant ENI managed to outdo the Hague-based multinational oil and gas titan. ENI’s operations caused nearly 350 spills last year even though it operates in a much smaller area, the report states.

    “These figures are seriously alarming. ENI has clearly lost control over its operations in the Niger Delta. And despite all its promises, Shell has made no progress on tackling oil spills,” Audrey Gaughran, Amnesty International’s Global Issues Director, said in a statement.

    “In any other country, this would be a national emergency. In Nigeria it appears to be standard operating procedure for the oil industry. The human cost is horrific — people living with pollution every day of their lives.”

    The companies claim that they only spilled 30,000 barrels in all of 2014, and “blame sabotage and theft for the majority of the spills.” But the Amnesty report does not give these assertions much credence: “This claim is hotly contested by communities and NGOs and has been shown to be wrong.”

    Gaughran goes on to say that the level of scrutiny applied to the two spills in Bodo was extraordinary, yet that’s what it would take to determine the true extent of Shell’s financial liabilities in Nigeria.

    But holding Shell accountable is about more than just forcing it to pay up for the damage it’s done — it’s also about “a very serious human issue.”

    “Shell is cheating people out of just compensation,” Gaughran says. “The Bodo case makes clear just what it takes to get this company to own up to the truth about oil spills — six years and UK court proceedings. What about all the hundreds of other communities this company has potentially cheated?”

    Incredibly, ENI’s 350 spills in 2014 is down slightly from previous years. The company caused over 500 spills in 2013 and around 475 in 2012, prompting Amnesty International to call for both the Italian and the Nigerian governments to take “urgent action” in curtailing the company’s negligent practices.

    The report notes that under Nigerian law, the companies are responsible for stopping and cleaning up spills, as well as remediating the affected area, though “this rarely happens” and as a result, “people living in the Niger Delta are living with the cumulative impacts of decades of pollution.”

    Gaughran laid out some basic steps that would begin to address the problem: “As a matter of priority all oil firms in Nigeria must urgently disclose the age and condition of their infrastructure, carry out reviews of their operating practices, and make the findings public so that communities know what is going on.”

    •Source: http://desmogblog.com

     

  • Shell completes sale of OML 29, pipeline

    Shell completes sale of OML 29, pipeline

    The Shell Petroleum Development Company of Nigeria Limited (SPDC) has completed the sale of its interest in oil mining lease (OML) 29 and the Nembe Creek Trunk Line (NCTL) and related facilities in the Eastern Niger Delta.

    According to SPDC’s Corporate Media Relations Manager Precious Okolobo, the oil major’s interests in OML29 and the NCTL were sold to Aiteo Eastern Exploration and Production (E&P) Company Limited.

    Total cash proceeds for Shell amount to some $1.7 billion.  This divestment is part of the strategic review of SPDC’s onshore portfolio and is in line with the Federal Government’s aim of developing Nigerian companies in the country’s upstream oil and gas business, he added.

    Through SPDC and its other Nigerian companies, Shell produces the oil and gas needed to help fuel the economic and industrial growth that generates wealth for the nation and jobs for Nigerians.

    OML29 covers an area of 983 square kilometres and includes the Nembe, Santa Barbara and Okoroba fields and related facilities. The NCTL is 100 kilometres long and has a capacity of 600 thousand barrels per day. It was commissioned in 2010 and evacuates crude to the Bonny Crude Oil Terminal (BCOT).

    BCOT is not part of the transaction and will remain owned and operated by the SPDC Joint Venture.

  • Shell faults Bayelsa youths for blocking facility

    Shell Petroleum Development Company (SPDC)  has faulted the reasons behind the barricade of its Gbaran-Ubie Integrated Gas Plant in Bayelsa State by community youths.

    Aggrieved youths from Obunagha community were said to have blocked access to the SPDC’s joint venture multi-billion dollar facility to protest alleged neglect by the company.

    SPDC spokesman Mr. Joseph Obari yesterday debunked the allegations against the company, saying SPDC had never neglected its host communities.

    He said the oil firm had progressively fulfilled sustainable community development projects under the Global Memorandum of Understanding (GMoU).

    “Some youths from Gbarain have blocked access to the processing unit of SPDC JV’s Gbaran-Ubie Integrated Oil and Gas Plant in Bayelsa State over alleged failure by SPDC to provide amenities to the host community.

    “It is not true that SPDC has neglected host communities of our Gbaran-Ubie facility. We have progressively fulfilled agreed sustainable community development projects under the Global Memorandum of Understanding (GMoU).

    “For example, in 2014, projects worth over N100 million were completed in the GMoU cluster, covering 10 communities. The Bayelsa State government is leading discussions with the youths to end the protest.”

    Obari said: “The well was closed-in about 15 hours later, once it was safe to do so and the impacted area boomed off to prevent further spread of the spill.

    ”A Joint Investigation Visit (JIV) has been conducted, but it only determined the quantity of oil spilled and mapped the area of impact to the environment. A follow-up JIV is being planned to lift the line from underwater.”

  • Shell appoints Osagie as MD

    Shell appoints Osagie as MD

    •Sunmonu bows out after 36 years

    Shell Petroleum Development Company has appointed Mr. Osagie Okunbor, as its managing director.

    He has assumed office, succeeding Mr. Mutiu Sunmonu, who retired on Saturday after 36 years of service.

    Okunbor’s appointment had been announced in January while he was serving as a senior adviser in Shell’s Upstream International Operated business in The Hague, Netherlands.

    The new Shell helmsman, who is also assuming the role of the country chair, Shell Companies in Nigeria, brings over 28 years of industry experience and expertise to his new role.

    Okunbor is the third Nigerian MD of SPDC and country chair, Shell Companies in Nigeria.

  • Shell targets 210,000 bpd from Bonga field

    Shell targets 210,000 bpd from Bonga field

    TO boost production from Bonga, the mega deepwater oil field of Shell Nigeria Exploration and Production Company (SNEPCo), the firm has put in place an initiative called Bonga Business Improvement Plan (BBIP) aimed at increasing production from the asset from its  average daily output of 148,000 barrels per day (bpd) to 210,000 bpd.

    SNEPCo’s General Manager, Offshore Assets, Effiong Okon, said the BBIP was launched in April, last year with a tagline “Bonga Unleashed – 210!”

    He said BBIP is a transformational journey, that is not just about increasing the SNEPCO Bonga asset’s oil production levels and cash flow from its average of 148,000 bpd to 210,000 bpd. “It is also about building a deeper sense of pride in production in the hearts and mind of our people and driving the nine year old asset towards being a high reliability organisation,” he added.

    The strategic journey, according to the oil major began in first quarter of last year with a team consisting of Shell employees and consultants, who carried out interviews, deep dives and diagnostics sessions. The team was charged with looking at all aspects of Bonga operations and interfaces to figure out required actions to bridge identified gaps to potential.

    To achieve the aspired production within schedule, the skilled identified and mitigated threats to safe production. There were also monthly knowledge sharing and collaborative fora for project managers and change agents. Decision Review Boards (DRBs) were also held  on improvement plans and actions.

    The Business Improvement Lead, Global Production Excellence, Joe Gandolfo, said the DRBs were made up of a few senior team members and under the BBIP, DRBs were expanded to include team members closer to the operations.

    “Not only has the BBIP helped us elevate challenges and threats, it has fostered a climate of increased transparency and openness. People feel freer to speak their minds and raise issues without fear of reprisals. In 2014, for the first time ever, we had zero Total Recordable Cases,” he added.

    On the initiative, former Competence and Operations Excellence Manager, Emeka Maduekwe, said: “We now have integrated functional support teams working together to identify and deal with any high impact threats that could hamper safe production. Identified threats are then consolidated in a central database, prioritised and actions taken to address them are tracked through the weekly, monthly Operations Reliability Improvement Process meetings.”

    The Bonga Operations Manager, Theo Ekiyor-Katimi added: “Bonga will continue to strive to be number one value generator for the Shell Group. We aim to maintain a high and stable production environment which will further encourage shareholders’ confidence. Basically, we want to produce more, spend less and BBIP will enable us deliver on this goal.”

  • Shell to execute N1b Oloibiri health project

    Shell to execute N1b Oloibiri health project

    Shell has inked an agreement with the General Electric for the execution of a N1 billion health project, as part of three initiatives to mark 100 years of Nigeria’s nationhood.

    The project, which is phased over three years, aims to provide affordable and quality health care delivery through a population-wide approach in Ogbia Local Government Area, Bayelsa State.

    The project will involve the delivery of care through a network of four primary health centres and one general hospital using a Health System Strengthening model.

    It will also involve the establishment of a health research centre at Oloibiri to disseminate best practice for replication.

    A project steering committee has been set up, comprising representatives of the Shell Petroleum Development Company of Nigeria Ltd (SPDC), the General Electric, Bayelsa State Government, Federal University, Otuoke and Ogbia Local Government Council.

    “The Oloibiri project is one of the single biggest social investment initiatives we have undertaken in the Niger Delta and underlines our commitment to a better future for the people there,” said SPDC Managing Director & Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu, at the signing ceremony in Lagos.

    “We’re looking to see a holistic community health improvement in poverty alleviation, water and sanitation, safe/clean housing and household renewable energy among many others,” he added.

    The incoming SPDC MD and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, agreed.

    “This is a game changer in the provision of health care in the Niger Delta,” he said.

    Also reacting, Lazarus Angbazo President & CEO General Electric, Nigeria, added: “We’re pleased to act as implementing partner on a project that will significantly touch lives and improve the lot of community people.”

    The Commissioner of Health Dr. Ayibatonye Owei and the Vice Chancellor of Federal University, Otuoke, Prof. Mobolaji Aluko, pledged their support for the project.

  • Shell to pay out $83m for Niger Delta oil spills

    Royal Dutch Shell will pay out 55 million pounds ($83.4 million) in compensation for two oil spills in Nigeria in 2008 after agreeing a settlement with the affected community.

    The largest ever out-of-court settlement relating to oil spills in Nigeria is a step forward for the oil-rich Niger Delta region that has been hit by regular environmental damage, but it is tiny compared with the billions in compensation and fines BP had to pay after the Macondo rig disaster in the Gulf of Mexico in 2010, Reuters says.

    Though significantly higher than the 30 million pounds Shell had previously said it would be willing to pay, its deal is a fraction of the 300 million pounds-plus originally sought by the Bodo community in the Niger Delta.

    The payment will be split, with 35 million pounds shared evenly between 15,600 Bodo individuals and the remaining 20 million pounds set aside in a trust fund for projects such as health clinics and schools, said Martyn Day, senior partner at Leigh Day, the British law firm acting for the community.

    The individuals will each receive about 2,200 pounds, equivalent to a little more than 600,000 naira ($3,249), in the first such case to pay compensation directly to individual community members, Day said.

    Previous similar claims have tended to go through the Nigerian authorities, resulting in a disbursement to community chiefs, who were then expected to distribute the money.

    “It’s very unusual to have thousands benefit,” Day said. “The money will go directly to their bank accounts and this will hopefully be a model for future claims.”