FG rakes $4.5b taxes, royalties from Shell
Shell’s report on payments to governments has indicated that the Federal Government earned $4.5b from the oil multinational in the 2022 fiscal year.
The amount is made up of the money paid as production entitlement, taxes, royalties, and fees in 2022.
The disclosure was part of Shell’s reports on sustainability, climate & energy transition, lobbying and payments to governments.
A breakdown of the amount showed that the company through Shell Petroleum Development Company (SPDC) and Shell Nigeria Exploration and Production Company (SNEPCO) paid $3.035m as production entitlement, taxes $711.850m, royalties $691.648m and fees $81.639m all totaling $4.521b.
Further analysis of the payment also showed that money realised through Production Sharing Contract (PSC) — (OPL212/OML118, OPL219/OML135), as production entitlement to the government was $539.313m, taxes- $278.348m royalties – $480.566m and fees – $20.737m. These amounted to $1.318b.
Production entitlement from the company’s West Asset amounted to $1.783b whereas tax paid in respect of PSC 1993 (OML133) amounted to $194.604m.
The company’s East Asset attracted a production entitlement of $713,234m, while other royalties, taxes and fees paid by SPDC $510.881m.
Shell in the report stated: “Our operations generate revenue through taxes and royalties for governments around the world. These taxes and royalties are often used by governments to fund essential public services like education, transport and healthcare.
“Since 2016 Shell has made mandatory disclosures under the UK’s Reports on Payments to Governments Regulations 2014 (amended December 2015). We have published the revenues that our operations generate through taxes and royalties on a voluntary basis since 2012. We believe that being open about our tax payments helps people to understand how much we pay and why.
“In 2022, Shell paid $68.2b to governments. We paid $13.4b in corporate income taxes and $8.2b in government royalties. In addition, we collected $46.6b in excise duties, sales taxes and similar levies on our fuel and other products on behalf of governments.”
“Shell has been formally reporting on sustainability-related performance for more than 25 years, with the aim of being transparent about activities that are important to investors, governments, and civil society. The Shell Sustainability Report outlines our social, safety and environmental performance in 2022 and sets out our progress in transitioning our business to net-zero emissions.