Business & Economy - News - Oil & Gas - April 6, 2022

Nigeria received 2nd largest tax revenue in 2021, after Norway, says Shell

By Bassey Udo

The Nigerian government received the second largest payment as tax in 2021, after Norway, says Shell Group.

In its 2021 Sustainable Report published on Tuesday, Shell said total payments covers 99 countries and locations across all its businesses was about $58.7 billion.

The company said about $20.855billion of this amount was paid specifically as corporate income taxes, production entitlements and other fees.

Details of the report showed that Shell paid about $6 billion in corporate income taxes and $6.6 billion in royalties to different governments in 25 countries of its operations around the world, apart from about $46.1 billion the company collected as excise duties, sales taxes and similar levies on its fuel and other petroleum products on behalf of the governments.

However, in its Payments to governments report, Shell said out of a total payout of $20.855billion to the different countries, about $4.481 billion was paid specifically to the Nigerian government in 2021.

The payment represents the second highest payout after Norway, which received $4.518billion during year.

A breakdown of the payments to Nigeria, the report said, showed that $2.886 billion was paid by Shell as part of its equity stake under the production sharing contract with the Nigerian National Petroleum Company (NNPC) on behalf of the Nigerian government.

Shell CEO, Ben van Beurden

Shell Petroleum Development Company (SPDC) is the operator of a Joint Venture Agreement with the NNPC, which holds 55 percent equity, while Shell holds 30 percent, and its partners, Total Exploration and Production Nigeria Limited (TEPNG)10 percent and Nigerian Agip Oil Company limited (NAOC) 5 percent.
In addition, Shell Gas B.V. holds a 25.6 percent shareholding in Nigeria LNG Limited, which produces and exports liquefied natural gas (LNG) to European and other markets.
Also, the report said Shell paid another $511.271 million during the year as taxes; $573.431 million as royalty, and $510.274 million as other fees, bringing the total payment during the year to about $4.481 billion. The company did not pay for bonuses and infrastructure improvement.

Details in the tax contribution report 2020 showed the company has a total of 2,706 employees on its payroll, with with total revenues at about $2.785 billion, consisting third-party revenues of $1.035 billion and related-party revenues of $1.751 billion.

Besides, the company’s profit before tax for the year was put at
$1.030 billion, with total tax paid to the government at about $472.749 million; accrued tax at $383.80 million; tangible assets $7.236 billion ;Stated capital $1.527 billion, and accumulated earnings $1.731 billion.

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