Shell contributes over $1bn in taxes to Nigerian Govt

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Anglo-Dutch oil giant Shell has announced that it paid over $1 billion in corporate taxes and royalties to the Nigerian government in 2023. This figure, revealed in their recently published 2023 Shell Briefing Notes, represents a significant contribution to the national coffers.

The breakdown shows the Shell Petroleum Development Company of Nigeria Limited (SPDC) contributing $442 million, while Shell Nigeria Exploration and Production Company (SNEPCo) remitted $649 million. This combined total reflects a decrease from the $1.36 billion paid in 2022.

A statement by the company’s Media Relations Manager, Abimbola Essien-Nelson, said similar payments made by the two companies in 2022 amounted to $1.36bn.

“These payments are Shell exclusive and do not include those made by our partners,” said SPDC Managing Director and Country Chair, Shell Companies in Nigeria, Osagie Okunbor.

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Okunbor explained, “Shell companies in Nigeria will continue to contribute to the country’s economic growth through the revenue we generate and the employment opportunities we create by supporting the development of local businesses”.

Reasons for the Decline

While the official reasons behind the decrease are not explicitly stated, it’s possible that factors like global oil prices, production volumes, or operational costs in Nigeria might have played a role.

Impact on Nigeria

Despite the decline, Shell’s tax contribution remains a substantial source of revenue for the Nigerian government. These funds are crucial for financing public services, infrastructure development, and social programs. The Federal Government is currently seeking a $750 million loan from the World Bank, and healthy revenue streams from oil majors like Shell are vital for demonstrating fiscal responsibility.

Transparency and Accountability

The announcement by Shell comes amidst ongoing discussions about transparency and accountability in the Nigerian oil sector. Civil society organizations have long advocated for a fairer share of oil revenue for local communities and a more robust regulatory framework.

Looking Ahead

The future level of Shell’s tax contributions will likely depend on several factors, including global oil market conditions, Nigerian government policies, and the company’s own operational performance. This announcement highlights the significant financial contribution of oil majors to the Nigerian economy, but also underscores the need for continued discussions on transparency and responsible resource management.