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Operations
Shell has been operating in Nigeria for over 50 years and the Shell Petroleum Development Company of Nigeria (SPDC) is the country’s longest standing energy company. Today Shell companies produce oil and gas from land and swamps in the Niger Delta and from deep water about 120 kilometres off the coast.
Oil and gas
SPDC is the largest private-sector oil and gas company in Nigeria. Shell operates the joint venture (Shell 30%) and SPDC’s activities in the Niger Delta extend across 30,000 square kilometres. SPDC is capable of producing around 1 million barrels of oil equivalent per day (boe/d).
We also have a share (25.6%) in the Nigeria Liquefied Natural Gas Company (NLNG). This harnesses Nigeria’s vast natural gas resources and produces liquefied natural gas (LNG) and natural gas liquids.
Shell Nigeria Gas is wholly owned by Shell. We promote gas as a more reliable and cleaner burning alternative for Nigerian industries, operating several distribution systems.
Offshore energy
In 1993 we formed the Shell Nigeria Exploration and Production Company Ltd (SNEPCO) to develop Nigeria’s deep-water oil and gas resources offshore.
SNEPCO’s first deep-water discovery was the Bonga field, 120km offshore, which began production in 2005. Bonga has the capacity to produce more than 200,000 boe/d and 150 million cubic feet of gas – enough to power over 1.5 million average European households.
Payments to governments
SPDC’s main contribution to communities in the Niger Delta is through the taxes and royalties it pays to the federal government. Between 2004 and 2008 SPDC contributed more than $34 billion in taxes and royalties to the federal government, which receives about 95% of the revenue after costs from SPDC’s onshore production in the Niger Delta.
Along with the Nigerian government, Shell and SPDC are leading supporters of the Extractive Industries Transparency Initiative (EITI). This encourages oil, gas and mineral companies to disclose how much money from their activities is paid to governments. In 2003, SPDC was the first company to disclose what it paid to the Nigerian government.
The Nigerian government has been running its own national EITI programme since 2004 – SPDC strongly supports this and is one of the two industry representatives actively involved in its National Stakeholder Working Group.
Buying and hiring locally
Through buying and hiring locally Shell-run operations in Nigeria create local benefits and build trust. They use Nigerian contractors and hire workers from local communities where they can. In 2008 Shell-run operations in Nigeria awarded contracts worth over $900 million to local companies.
The Shell Petroleum Development Company and Shell Nigeria Exploration and Production Company employ around 6,000 direct staff and contractors. More than 90% are Nigerian.
Providing domestic power
Shell was the first and remains a major supplier of domestic power in Nigeria, fuelling industry and providing electrical power. Shell has built the country’s largest power station at Afam, which is up to 30% more efficient than many of Nigeria’s existing power plants. It takes gas from the nearby Okoloma field, adding around 20% to Nigeria’s supply capacity and some 20% to the country’s domestic gas supply.
