Nigeria received highest payment from Shell to governments in 2023 at $4.92 billion.

In 2023, Nigeria was the top recipient of payments from Shell, receiving approximately $4.92 billion. This amount, the highest paid to any government by the oil giant, included company income taxes, fees, royalties, and production entitlements from various projects within Nigeria.

This marked a $408 million increase from the $4.52 billion paid to Nigeria by Shell in 2022.

Shell’s total payments to governments across 27 countries amounted to about $29.51 billion in 2023. Following Nigeria, Oman and Norway were the second and third highest recipients, with payments of $4.09 billion and $3.81 billion, respectively.

For Nigeria, Shell paid around $3.46 billion in production entitlement, $587.64 million in taxes, $727.85 million in royalties and $146.09 million in fees.

Payment to government parastatals

The entities or government agencies who received these payments on behalf of the federation are; the Federal Inland Revenue Service (FIRS), the NNPCL, NUPRC, NDDC, NASENI and Nigeria Police Trust Fund.

The FIRS collected around $587.64 million as Company Income Tax (CIT) from about five different production-sharing contracts and the Shell Petroleum Development Company of Nigeria Ltd.

The bulk of payment was received by the Nigeria National Petroleum Company Ltd which received $3.46 billion in production entitlements from six production-sharing contracts it is engaged in. The NNPCL was paid $752.85 million from OPL212/OML118, OPL219/OML135 while it got $864.36 million from its EAST ASSETS and $1.850 billion from WEST ASSET.

The Niger Delta Development Commission (NDDC) was paid around $139.99 million as Fee while the National Agency for Science and Engineering Infrastructure (NASENI) received around $4.28 million in the same fee as the NDDC.

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) received $727.85 million in royalties and $1.73 million as fees for the year.

Shell’s presence in Nigeria

Shell’s history in Nigeria dates to the beginning of oil exploration in the country. However, earlier in 2024 the company announced a $1.3 billion deal with Renaissance Consortium to transfer its onshore assets to the group- a move to divest from problematic onshore operations in Nigeria.

However, Shell’s divestment has been heavily criticised by communities, Civil Society Groups (CSOs) and rights groups over its legacy of oil spills and destruction of the environment. Last month, a right group published a report calling on Shell to clean up the Niger Delta before it divests.

The proposed sales of its onshore assets to local operators are subject to approval from the appropriate regulatory authorities in Nigeria- the NUPRC.