Case study Nigeria

The Nigerian government and Shell are leading supporters of the UK Government’s Extractive Industries Transparency Initiative (EITI) that encourages public disclosure of the revenues received from natural resources.

Handshake In 2003, the Shell Petroleum Development Company of Nigeria (SPDC) became the first company to disclose the revenues it paid the Nigerian government. The publication of these figures, for the years 2001 and 2002 in the company’s annual People and the Environment report, was made with the permission and full support of the Nigerian government.

In 2006, SPDC continued to disclose revenues paid to the Nigerian government in its People and Environment Report. In 2006, SPDC paid US $2.1 billion in petroleum profit taxes, a 40% decrease compared with $3.1 billion paid in 2005 due to the reduction in production because of the security situation. Similarly, it paid US $771 million in royalties, compared with $1.2 billion paid in 2005. Shell Nigeria Exploration and Production Company Ltd (SNEPCO) paid royalties and profit taxes of $594.8 million from Shell-funded interests in Bonga, Abo and Erha deepwater fields.

In recognition of the need for transparency of petroleum revenue data, the Nigerian Government established the Nigerian Extractive Industries Transparency Initiative (NEITI) in 2004. SPDC supports the NEITI and is actively involved in its National Stakeholder Working Group as one of the two industry representatives.

The Working Group appointed a UK firm of accountants, the Hart Group to conduct a financial, process and physical audit of the oil industry for the years 1999 to 2004. The report and progress updates are available at NEITI’s website, www.neiti.org - opens in new window.

The NEITI bill has undergone a second reading in the National Assembly and is now awaiting the third reading and final stages before being passed into law.

Case study Nigeria

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