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The Guardian
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Nigeria receives $3.7bn revenue in taxes, royalties


• As Shell pays $55.6bn to 31 host governments
The Nigerian Government is said to have received the sum of $3.7 billion in taxes and royalties, from Anglo-Dutch Shell Group.

The sum represents the highest payment made to any single government among the Shell 31 countries of operations, according its latest Global Report for 2016.

The total payments could have paid in excess of 50 per cent of its total joint venture cash call arrears to oil companies estimated at about $6.8billion in 2016, as the share of its counterpart funding owed by the Nigerian National Petroleum Corporation (NNPC) for oil and gas projects if deployed for this purpose.


According to the report, the oil multinational paid $270.7 million as production entitlement in the Shell Petroleum Development Company (SPDC) shallow water project; $111.2 million for SPDC West; and $1.05 billion for SPDC East.

The Nigerian Government also got another $1.2 billion as production entitlement, taxes and royalties for Production Sharing Contract 1993, for Oil Prospecting License (OPL 212)/Oil Mining Lease (OML118), OPL 219/OML135), in addition to an entity level payment of $1.06 billion.

Against this backdrop, Shell noted that it remained a major contributor to the Nigerian economy, not only through the energy they produce and the revenues they generate for the country, but also via their extensive supply chain, local content and social investment.

In 2016, Shell paid more than $55.6 billion to governments in its countries of operation, according to Shell Global.

A breakdown of the payments revealed that the oil firm paid $4.4 billion in income taxes, $2.3 billion in government royalties, and collected $48.9 billion in excise duties, sales taxes and similar levies on its fuel and other products on behalf of governments.

The report titled: “Revenue for Governments”, released on Tuesday, showed

Governments of Malaysia, Norway, and Iraq occupied the second, third and fourth positions of top receipts of royalties and taxes with $2.6 billion, $2.5 billion and $1.6 billion respectively.

Shell stated in the report: “In fulfilling the requirements set out by the U.K. we are bound by the regulations as they are set out, and are reporting on a different basis to the voluntary reports in the past. For example, like in 2015 this year’s report excludes payments related to refining, natural gas liquefaction or gas-to-liquids activities as these are not in scope of the U.K. regulations.

“Tax binds governments, communities and businesses together. Revenue transparency provides citizens with important information to hold their government representatives accountable and to advance good governance.

“Shell is committed to transparency as it builds trust. Trust is essential for a company that operates in our line of business, reflecting our core values of honesty, integrity and respect for people.

“By fulfilling the mandatory disclosures in line with the new U.K. legislative requirements we demonstrate that extraction of natural resources can lead to the opportunity of government revenue, economic growth and social development.”

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