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Shell Corporation has said its payments to the Nigerian government grew to $4.32 billion in 2017, up nearly 19 percent from $3.64 billion in 2016. The bulk of these payments, $3.197 billion, in all, went to the Nigerian National Petroleum Corporation (NNPC) for production entitlement.
According to the corporation’s sustainability report released yesterday, the company through its Nigerian affiliate, Shell Petroleum Development Corporation (SPDC) Joint Venture said it has contributed $23 billion to the Nigerian government from 2013–2017.
Shell further said the share of royalties and corporate taxes it paid to the Nigerian government in 2017 amounted to $1.1 billion, it subsidiaries, SPDC paid $0.4 billion while Shell Nigeria Exploration and Production Company SNEPCo paid $0.7 billion.
When contacted, Ndu Ughamadu, NNPC spokesman said he would confirm the claims but was yet to get back to BusinessDay before publication.
However, if NNPC were a real company accountable to shareholders including the Federal government and States , its reported loss of N6billion in December alone should raise eyebrows and concern . However, this pattern of losses has been the norm for the past 30 years.
Between 2012 and 2016, NNPC generated N15.5 trillion in revenues but it also recorded a deficit of N3.1 trillion, and recorded expenses valued at N18.6 trillion in the same period, according to an investigation by a senate committee.
Former Central Bank governor, Sanusi Lamido Sanusi, raised alarm in September 2013, that between January 2012 and July 2013, NNPC had diverted the sum of $20 billion meant for the Federation Account.
Probes carried out by PwC Nigeria, a professional service firm, revealed unaccounted oil sales, including $20 billion established for 2014 alone.
NNPC claims the bulk of its losses comes from subsidy on fuel importation which Ibe Kachikwu, minister of state for petroleum resources recently put at over N1.4 trillion in a year.
Rafiq Raji, chief economist at Macroafricaintel, said the NNPC is in the best position to explain to Nigerians what it does with the revenue it gets.
But the organisation is unwilling. While it claimed over the weekend that it has completed outstanding audit on its financial statements from the years 2011 to 2016, it has refused to make it public. Scrutiny from the lawmakers has made as much impact as a wink in the dark.
Value realised from the sale of Nigerian crude have had little impact on Nigerians. The life expectancy in Africa’s biggest economy is a paltry 53 years, in Norway a fellow oil producer, it is 82 years and 64 years in Rwanda. Nigeria has the fourth worst maternal mortality rate in the world, ahead of only Sierra Leone, Central African Republic, and Chad and one in three Nigerian children is chronically malnourished.
“Tragically, 40 years after Beko Ransome-Kuti helped other countries set a course for the future, the Nigerian primary health care system is broken. The evidence for this can be found in the epidemic of chronic malnutrition, or stunting. As the name suggests, chronic malnutrition is not a disease children catch. It is a condition that develops over time because they are deprived of a diverse diet and the services a strong primary health care system provides,” Bill Gates told Nigerian leaders in a recent address at the National Executive Council meeting.
Africa’s biggest economy relies on donor assistance to fund and immunise its children and equip primary health centres.
“Your national income level is about to make you ineligible for certain kinds of development assistance and loans that you’ve been relying on to fund your health system and other priorities. Without more and better spent domestic money, investment in your people will decline by default as donor money shrinks—a lose-lose scenario for everyone,” said Gates.
Rising from its 260th Monetary Policy Committee (MPC) and the first for 2018, on April 4, the Central Bank of Nigeria warned that the country’s penchant to eat all the proceeds from its oil resources without a robust savings programme to wade-off future shocks from falling oil prices, would be disastrous.
“MPC observed increasing monetization of oil proceeds as evident in the growing Federation Accounts Committee (FAAC) distribution, relative to the 2017 level of disbursements. The Committee urged the Government to initiate strong stabilization programmes and to freeze the growth in its aggregate expenditure and FAAC distributions in order to create savings; needed to stabilize the economy against future oil price related shocks,” said Godwin Emefiele, the CBN governor.
Shell Petroleum Development Company (SPDC) in the 2017 sustainability report also stated that oil spills in its operational areas are caused by oil theft, sabotage of pipelines as well as illegal oil refining.
“In 2017, close to 90% of the number of oil spills from SPDC JV facilities were due to illegal activities. Regrettably, spills also occur due to operational reasons,” it said.
It stated that regardless of the cause, it cleans up and remediates areas impacted by spills that come from its facilities and in the case of operational spills, it also pays compensation to people and communities impacted by the spill once the clean-up and remediation are completed, the work is inspected, and, if satisfactory, approved and certified by Nigerian government regulators.
Crude oil theft from SPDC JV’s pipeline network amounted to around 9,000 barrels of oil a day (b/d) in 2017, an increase from around 6,000 b/d in the previous year. The increase in 2017 can partly be explained by the militant-induced shutdown of the Forcados export terminal in 2016, which reduced opportunities for third-party interference.
The number of sabotage-related spills in 2017 increased to 62 from 48 in 2016. In 2017, 92 sites were remediated and certified (out of 251 identified f), with 32 in Ogoniland. During 2017, 84 new sites requiring remediation were identified, of which eight were in Ogoniland. In total, there are 243 oil spill sites that require remediation, according to Shell.
On the Ogoni clean up, the reports said the company is working with the relevant stakeholders to implement the 2011 UN Environmental Programme (UNEP) report on Ogoniland.
“Over the last six years, SPDC has taken action on all the UNEP recommendations addressed specifically to it as operator of the joint venture and has completed the majority of these recommendations”.
The UNEP report recommended the creation of an Ogoni Restoration Fund with $1 billion capital, to be co-funded by the Nigerian government, the SPDC JV and other operators in the area. SPDC is supporting and contributing its share to the fund and on behalf of the SPDC JV made $10 million available in 2017 to help set up the Hydrocarbon Pollution and Remediation Project (HYPREP), a government-led body to clean up contaminated sites.
OLUSOLA BELLO & ISAAC ANYAOGU
