Royal Dutch Shell the major international oil company operating in Nigeria has said its payment to the federal government increased from $3,638,241,040 in 2016 to $4,322,742,582 in 2017.
The rise in payment was as a result of a 10 % growth in production, the oil company said in its 2017 sustainability report published on Monday.
The company said in the report that output from its operated fields averaged 464,000 barrel of oil equivalent per day (boe/d) while production from offshore and deep-water fields managed by its local subsidiary, Shell Nigeria Exploration and Production Company Limited (SNEPCo), averaged 167,000 boe/d.
A breakdown of money paid to the Nigerian government by Shell shows that it is made up of production entitlement, taxes, royalties, and fees.
While $3,197,530,557 was spent on production entitlement, $765,526,389; went to taxes, $245,769,306 was paid as royalties and $113,916,331 was used to pay fees.
The production entitlement was paid to the NNPC, the Department of Petroleum Resources collected the royalty, while the Federal Inland Revenue Service received the tax returns.
The Niger Delta Development Commission (NDDC), was given a statutory allocation of $79,675,241.
The IOC, however, warned that insecurity in the Niger-Delta remains a challenge to its operations.
The proceeds of Shel’s remittances to the federal account, were derived from its operations in Shell Petroleum Development Company (SPDC) in Shallow Water, SPDC West, SPDC East and Production Sharing Contracts (PSC) 1993 (OPL212/OML118, OPL219/OML135) and PSC 1993 (OPL209).