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Shell : A committed partner to Nigeria’s economic development

Shell : A committed partner to Nigeria’s economic development

UGO AMADI, Business Editor

“Unless commitment is made, there are only promises and hopes; but no plans.” ― Peter F. Drucker

In spite of the challenges faced by various companies in Nigeria and especially oil and gas sector, oil giants Shell has shown that it remains strongly committed to the development of Nigeria with her economic contributions of $23 billion or N5.31 trillion to federal government coffers from 2013 to 2017.

Also, the company’s share of royalties and corporate taxes paid to the Federal Government of Nigeria in 2017 is approximately $1.1 billion or N333.33 billion

These figures were contained in “Shell in Nigeria Briefing Notes” released this year by Shell.

It will interest you to note that the Oil giants has not just made promises but her committed contribution has given robust growth in other areas of the economy, improved infrastructure and progress on human development crucial to Nigeria’s long-term economic and social well-being.

Working in close collaboration with the Nigerian National Petroleum Corporation (NNPC,) the concessionaire and co-venture partners, Shell companies has implemented a robust social investment portfolio that has made visible impact in the six geopolitical zones of Nigeria.

According to Shell Country Chair, Mr. Osagie Okunbor, “For Shell Companies in Nigeria, 2017 was an important year in enabling the profitable harnessing of the country’s oil and gas resources that will contribute to the development of the economy.

First, an alternative funding agreement worth $1 billion (N303.03 billion) was signed between, Shell Production and Development Company, SPDC, Total E&P Nigeria Ltd (TEPNG) and their government partner, the Nigerian National Petroleum Corporation (NNPC) to help develop two shallow water projects in the Niger Delta – Short Term Oil and Gas Growth (STOGG) and Estuary of Amatu. Okunbor stated

Further Oil Development (EA FOD). Second, the SPDC JV commenced production at the Gbaran-Ubie Phase 2 project that will help boost gas supply to the domestic market and maintain supply to the export market.

Third, SNG signed an agreement with a Nigerian company, Shoreline Energy, to market and distributes natural gas to wholesale and retail customers in the Lagos area”.

He said that in 2016, the company’s corporate income tax paid to the Federal Government of Nigeria amounted to about $323 million or N101.83 billion and that between 2012 and 2017, the company has committed over $45 million (N14.19 billion) (approximately $12 million [N3.78 billion) (Shell share) to social investment projects in the Niger Delta, especially in the areas of capacity building and infrastructure development.

“In 2017, the company flagged- off the construction of the 34-kilometer Bonny – Bodo road following an agreement with the Federal Government of Nigeria to co-fund (50:50) the project estimated to cost more than $190 million (N60 billion) (Shell Share $49 million [N15.36 billion). This is a strategic infrastructure project that will enable socio-economic integration in the Niger Delta region and Nigeria at large when completed”, he disclosed.

Shells Bonga Oil Field

On Bonga field, the Managing Director, Shell Nigeria Exploration and Production Company (SNEPCo) ,Bayo Ojulari said the company has delivered a total of 763 million barrels of oil from the Bonga field between first production in 2005 and 2017.

The oil giant has also expanded the field with further drilling of wells in Bonga Phases 2 and 3 and through a subsea tie-back that unlocked the nearby Bonga North West field in August 2014.

Ojulari noted that “The success story at Bonga is not only that it is Nigeria’s first oil and gas production project in more than 1,000 metres of water, or that It increased Nigeria’s oil production capacity by 10% in 2005,” “The main point is that Bonga is a Nigerian venture delivered by Nigerians using global expertise and processes offered by Shell that have launched Nigeria into the league of notable deep -water players.”

He identified the Bonga turnaround maintenance in March and April 2017 as a significant milestone in SNEPCo’s operations. This was the most complex and largest of the three previous turnaround maintenances in the 12-year history of Bonga, and has helped to ensure safe and sustained production and reduced unscheduled production deferments. More than 1,000 people and more than 50 Nigerian contractor and sub-contractor companies participated in the exercise.

Another milestone , to him was the refurbishment of five subsea trees in 2015 at a fabrication yard at Onne in Rivers State, the first in Sub-Saharan Africa with Nigerian engineers and technicians playing key roles. The feat is consistent with the growth of support industries from Bonga operations which have boosted demand for a range of goods and services including offshore vessels and platforms, materials, floating hotels, helicopters and manpower, creating jobs and providing a range of training and maintenance services to the industry locally.

Investment on renewables

On renewables, Shell says it has invested up to $2 billion every year on renewables and clean fuel technology, from its total annual budget of between $25 billion to $30 billion, amount it said is over what known world’s top oil and gas companies spend on low-carbon energies..

Shell fund supports Nigerian contractors

As part of its effort to help vendors and suppliers in the oil and gas industry secure funds at reduced interest rates, relaxed collateral requirements and quicker processing time , about 290 Nigerian contractors received loans worth more than N472 billion under the Shell Contractor Support Fund which was set up by Shell companies in Nigeria

Also, Shell Companies in Nigeria awarded contracts worth over N230 billion to Nigerian contractors in 2017, representing 94percent of the total contracts in that year.

“We’re pleased to support Nigerian contractors to play greater roles in the oil and gas industry,” said Osagie Okunbor, Country Chair Shell Companies in Nigeria and Managing Director of The Shell Petroleum Development Company of Nigeria (SPDC) Ltd,

“As pioneers in the industry we have taken deliberate steps to award contracts to Nigerian vendors and worked with them to grow their capacity, cost efficiency and delivery timelines. We discovered however, that access to finance has been a challenge, and the search for a solution led to the Shell Contractor Support Fund.” Okunbor stated

Shell companies started their intervention in 2011 with the Shell Kobo Fund which gave way to the Shell Contractor Support Fund the following year with seven participating financial institutions which have since set aside more than N690 billion for contract execution by Nigerian companies. The banks are Access Bank Plc, Skye Bank Plc, Zenith Bank Plc, Stanbic IBTC Bank, First Bank of Nigeria Limited, Standard Chartered Bank, and Guaranty Trust Bank.

Nigerian ownership of key assets such as rigs, helicopters and marine vessels is also a focus, with Shell Companies providing technical and financial support to companies across a range of sectors including transportation, manufacturing and research and development.

Social Investment

On social investment, Mr. Okunbor said Shell companies had continued to work with government, communities and civil society to fund and implement projects and programmes that have a lasting impact on people’s lives in the Niger Delta and Nigeria as whole. For example, since 2006, the SPDC JV has disbursed more than N 41 billion to 37 active Global Memorandum of Understanding (GMoU) clusters in Rivers, Delta, Bayelsa and Abia states. A GMoU is an agreement that brings a group (or cluster) of communities together with representatives of state and local governments, SPDC and NGOs, with the SPDC JV providing five-year funding for communities to implement development projects of their choice.

Social investment activities of Shell companies focus on community and enterprise development, education, health, access-to-energy and since 2016, road safety. In 2017, SPDC JV, Shell Nigeria Exploration and Production Company and Shell Nigeria Gas spent more than N 18 billion on direct social investment projects. Nigeria is the largest concentration of social investment spending in the Shell Group.

Supported infrastructure growth in Rivers State

The Shell Petroleum Development Company of Nigeria Limited (SPDC) says out of the over N41billion disbursed for community projects in Niger Delta, about N15billion went to Rivers State under the Global Memorandum of Understanding.

According to the General Manager, External Relations of SPDC, Igo Weli, SPDC JV funding enabled 19 GMoU clusters in Rivers State to embark on projects covering health, education, water and power supply improvement, sanitation and infrastructure development. He added that the success of the GMoU initiative proved what could be achieved when government, international oil companies, communities and NGOs worked together for the common good.

Under the terms of the GMoU, SPDC JV provides secure five-year funding for communities to implement development projects of their choice, which are managed by Cluster Development Boards under the guidance of mentoring NGOs.

On social infrastructure ,Shell listed N1.5billion ultramodern library donated to the state government to commemorate Nigeria’s centenary celebration, and the establishment of a Community Health Insurance Scheme at Obio Cottage Hospital in Port Harcourt where the average number of patients increased from about 600 to about 7,500 per month in 2017, making it one of the most utilised health facilities in the area. He said 10 other hospitals in Rivers State also enjoyed ‘robust health intervention scheme by SPDC JV’.

In education, he cited the establishment of the first centre of excellence in Marine Engineering and Offshore Technology at Rivers State University in Port Harcourt in 2017, which has commenced programmes leading to the award of Master’s degrees in Marine Engineering (Power Plants), Naval Architecture and Offshore and Subsea Engineering. This, he said was in addition to the many SPDC JV scholarship schemes which date back to the 1950s.

For a better society

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