Economic contribution

Nigeria is one of the top oil and gas producers in Africa and has the continent’s largest natural gas reserves. Population estimates range from 160 –175 million and the United Nations predicts that Nigeria could have the world’s fourth largest population by 2030. It is therefore an economic and political necessity for Nigeria to make the most of its energy resources. Shell Companies in Nigeria work in partnership with the Federal Government of Nigeria, local and international companies, investors, contractors and communities in meeting this opportunity.

Energy and Revenue

Shell Companies in Nigeria contribute to the Nigerian economy through the energy they produce and revenues they generate for the country.

In 2016, Shell-operated ventures in Nigeria produced an average of 572,000 barrels of oil equivalent per day (boe/d)*, with 369,000 boe/d from the Shell Petroleum Development Company of Nigeria Limited operated Joint Venture (SPDC JV) and 203,000 boe/d from the Shell Nigeria Exploration and Production Company Limited (SNEPCo).

Shell Nigeria Gas Limited (SNG) supplies natural gas to about 90 industrial customers in Ogun, Rivers and Abia States. The gas is used for power generation and processing by industries for the manufacture of domestic products ranging from household consumables, to household utensils and hardware. Among its customers are four compressed natural gas (CNG) companies that make the gas available to other companies outside the SNG pipeline network.

The SPDC JV is the major supplier of gas to Nigeria Liquefied Natural Gas Company Limited (NLNG) (Shell share, 25.6%). The SPDC JV Afam VI power plant, which has a 650 megawatt generating capability, supplied approximately 12% of the nation’s grid-connected electricity in 2016 and since its commissioning in 2008 has delivered 24.16 million Megawatt-hour (MWh) of electricity into the Nigerian grid.

According to the World Bank, in recent years Nigeria has depended on the oil and gas industry for as much as 90% of export income and 75% of overall government revenue. In 2016, the portion of total government revenue generated from the oil and gas sector was impacted by factors such as the recent decline in oil prices and lower oil production in the Niger Delta due to acts of vandalism and sabotage.

Shell Companies in Nigeria were one of the initiators and a leading sponsor of the Nigerian Extractive Industries Transparency Initiative, which publishes payments made to the government by extractive industries including international oil companies. The economic contribution* from SPDC JV partners to the Nigerian government between 2012–2016 was $29 billion. The Shell share of royalties and corporate taxes paid to the Federal Government of Nigerian in 2016 was approximately $1.4 billion (SPDC $1.0 billion; SNEPCo $0.4 billion).

Supply Chain and Local Content

Shell Companies in Nigeria make a major contribution to developing the country’s human resources and contracting capacity. In 2016, 96% of Shell Companies in Nigeria employees were Nigerian and 94% of contracts were awarded to Nigerian companies.

The use of locally manufactured goods and Nigerian service companies creates jobs in the communities in which we operate. In 2016, about $0.74 billion was spent by Shell Companies in Nigeria on contracts awarded to Nigerian companies.

Nigerian ownership of key equipment such as rigs, helicopters and marine vessels is a key focus and Shell Companies in Nigeria have been recognised for their work in local content, including the Local Content Operator of the Year Award by the Petroleum Technology Association of Nigeria (PETAN) in 2013 and 2015.

In 2016, PETAN honoured SPDC with the Distinguished Achievement Award (Corporate) in recognition of the company’s pioneering role in Nigerian content development. PETAN also handed out a Professional Award to Bayo Ojulari, Managing Director of SNEPCo, for his notable contributions to the development of Nigerian content in the oil and gas sector.

To boost the development of welding technology in Nigeria, SNEPCo in 2016 donated facilities including a modern test laboratory to the Nigerian Institute of Welding (NIW) at Imasabor-Ologbo, Benin City. Shell Companies in Nigeria also support Nigerian vendors and suppliers in the oil and gas industry to improve access to financing at reduced interest rates, relaxed collateral requirements and reduced loan processing time.

A contractor funding mechanism was started in 2011 with the Shell Kobo Fund, which gave rise to the Shell Contractor Support Fund in 2012. To date, the six participating banks have disbursed a total of $1billion to over 220 vendors.

In 2016, Shell Companies in Nigeria signed Memoranda of Understanding (MoU) with eight Nigerian banks under a revised Shell Contractor Support Fund, to enable local vendors and suppliers to finance projects executed for Shell Companies in Nigeria in line with the aspirations of the Nigerian Content Act.

Under the MoUs, Access Bank Plc, Skye Bank Plc, Zenith Bank Plc, Stanbic IBTC Bank, First Bank of Nigeria Limited, Standard Chartered Bank, First City Monument Bank (FCMB), and Guaranty Trust Bank Plc have set aside $2.2 billion for contract execution by Nigerian companies.

Social Investment

Shell Companies in Nigeria work with government, communities and civil society to implement programmes that have a lasting impact on lives in the Niger Delta and Nigeria as whole. Social investment activities focus on community and enterprise development, education, health, access-to-energy and since 2016, road safety. This, however, excludes community-driven development programmes and initiatives delivered through the Global Memorandum of Understanding (GMoU), which focus on various themes as determined by benefiting communities.

Collectively, Nigeria has the second largest concentration, after the United States, of social investment spending in the Shell Group. More details about Shell Companies in Nigeria’s social investment projects can be found in the ‘Social Investment’ section.

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* This figure is on a 100% basis.
* Economic contribution is derived from actual taxes, royalties and levies paid by Shell; estimates based on SPDC JV partners share of crude liftings, using Shell costs and prices; net receipts taken as Nigerian National Petroleum Corporation lifted volumes (valued at Shell prices); and from barrels of crude oil to refineries conservatively valued at 50% of export price less cash call obligation.

More In Briefing Notes


Shell has a history of nearly 60 years in Nigeria and the largest footprint of all the international oil and gas companies operating in the country.