Fact sheet: 2022 key developments
Shell Companies in Nigeria (SCiN) contribute to economic growth in Nigeria by generating revenue for the government through taxes, creating employment opportunities and contributing to the development of local businesses.
- $1.36 billion1 in corporate taxes and royalties paid to the Federal Government of Nigeria (SPDC $450 million and SNEPCo $907 million), compared with $986 million in 2021.
- SPDC, SNEPCo and SNG awarded $1.9 billion contracts to Nigerian-registered companies. Overall, there has been a 138% increase in SCiN's total value of contracts awarded in 2022 compared to 2021.
- SPDC, in compliance with statutory requirements, paid $59.04 million4 in 2022 to the Niger Delta Development Commission (NDDC). SNEPCo and its partners, in compliance with statutory requirements, paid $20.73 million to NDDC in 2022.
- SCiN directly employed more than 2,500 people (of whom 97% are Nigerian nationals) with 10,000 contractors supporting operations.
Shell has invested in game-changing businesses in Nigeria for over 60 years and in 2022 we continued to power progress, impacting lives and unlocking opportunities.
- Combined production by SPDC and SNEPCo (Bonga) was 478,940 barrels of oil equivalent per day in 2022. This is a reduction compared with 493,000 barrels of oil equivalent per day in 2021. The decline was largely the result of a partial shutdown of production for around six months due to an unprecedented increase in crude oil theft activities along the Trans Niger Pipeline (TNP).
- SPDC lifted the force majeure on its Bonny export programme with effect from March 15, 2023. The declaration of force majeure on March 3 2022, was on account of significantly lower deliveries of crude oil to the Bonny Terminal because of theft from illegal connections to pipelines.
- The Bonga FPSO, the country’s first deep-water exploration and production vessel, delivered a significant milestone of 1 billion barrels of oil export in the first quarter of 2023.
- SPDC successfully delivered first gas from the Enwhe East and KoloCreek to Soku Wells projects in 2022, adding about 350 mmscf/d of additional gas capacity.
- Following the expiration of OML 11 in 2019 and the subsequent non-renewal of the lease by the Federal Government of Nigeria, SPDC completed the handover of the lease and operatorship in 2022.
- SNG signed an agreement with the Oyo state government, in the south-west of Nigeria, to build a gas distribution infrastructure network with the intention of delivering gas to industries and other large-scale commercial businesses within the state and beyond.
- Shell acquired Daystar Power Group (Daystar Power), a provider of integrated solar power to commercial and industrial businesses across West Africa in December 2022. Daystar Power has around 250 projects across West Africa with approximately 40 megawatts of solar installation and plans to rapidly grow and expand into other markets.
- NLNG Train 7 offsite piping prefabrication work is in progress. In addition, construction activities on the workers’ camps, marine scopes and brownfield tie-ins have ramped up.
- At the end of 2022, All On’s total portfolio of renewable, energy access investee companies increased to 46, with a total of $23.6 million in investments committed to be paid. In addition, the All On Hub increased its supported businesses from 41 to 91 ventures. Since its inception in 2017, All On has delivered more than 75,000 energy connections2 through its investee companies.
- In 2021, Shell plc announced its intention to reduce its involvement in onshore oil production in Nigeria while remaining in deep-water and its integrated gas position in country. Information on Shell plc’s strategy is available on its website at www.shell.com.
Through our social investment, Shell Companies in Nigeria aim to contribute positively to socio-economic development in the communities where we operate.
- SPDC, SNEPCo and SNG spent $34.29 million3 funding direct social investment in 2022. These investments were in projects related to community, health, education, road safety and enterprise programmes.
- Since 2017, more than $106.3 million has been disbursed through the Global Memorandum of Understanding (GMoU) agreements in the Niger Delta by SPDC to provide secure funding for community-led development programmes. SPDC closed out4 its existing agreements as part of its transition to HCDTs5, in compliance with the PIA of 2021. In addition, $56.13 million6 was earmarked by SPDC and SNEPCo to be paid in 2023 in compliance with statutory requirements as contribution to HCDTs.
- In 2022, All On secured additional funding of $15 million from the Global Alliance for People and Planet to expand the Demand Aggregation for Renewable Technology (DART) programme, which aims to bring affordable solar products to communities most in need. The size of the DART programme's financing facility now stands at $25 million.
- The global Shell LiveWIRE entrepreneurship programme helped 220 Nigerians through providing training and grants.
- Shell donated $1 million, exclusive of its joint venture partners in Nigeria, to support the Federal Government of Nigeria’s efforts to provide relief to people impacted by the flood disaster. The donation was used to procure and distribute food and non-food relief materials, as well as medical supplies, to impacted communities hosting Shell operations in the affected states. In addition, more than 10 million Nigerian Naira was raised by SCiN staff for the cause.
AFFORDABLE AND QUALITY HEALTH CARE
SCiN have supported community health programmes in Nigeria since the 1980s, benefitting many hundreds of thousands of Nigerians.
- In 2022, SPDC and SNEPCo supported 17 healthcare centres7 in the Niger Delta and signature intervention projects throughout Nigeria.
- The Health-in-Motion mobile community health outreach programme, which takes free medical services to where people live and work, has benefitted more than one million people since its launch in 2010. Funded by SPDC and SNEPCo, the programme assisted a further 12,755 people in 2022.
- In 2022, SNEPCo constructed and renovated two primary healthcare centres for Internally Displaced Persons (IDPs) in Borno and Yobe states in north-east Nigeria. These provide Water, Sanitation and Hygiene (WASH) facilities, medical infrastructure and training for 252 healthcare workers.
- The number of people enrolled in the Community Health Insurance Scheme (CHIS) increased by 7,149 in 2022. More than 92,000 people have benefitted from CHIS since its launch in 2010. The scheme, which covers primary and secondary care services, is a partnership between SPDC, the Rivers state government and local communities.
- The Obio Cottage Hospital is a specialist maternal and child health hospital. It has specialist pre- and post-natal wards, an operating theatre and provides other services. In 2022, 3,243 babies were safely delivered, making a total of more than 37,000 safe births at the hospital since 2010. The hospital is funded by the Community Health Insurance Scheme (CHIS).
- Shell delivered the final phase of the Oloibiri Health Programme (OHP), which incorporates a health campus and an access road, a hybrid solar-powered electrification system, a zonal drug distribution centre, community water supply, and an infant care programme. The OHP is a Shell-funded local government initiative in the Ogbia area of Bayelsa state. Since its launch in January 2019, cumulatively more than 18,000 patients have been seen in the two OHP health facilities (Kolo General Hospital and Oloibiri campus).
INVESTING IN EDUCATION
SCiN have a long history of supporting education through scholarships and other initiatives. Since the 1950s, the Shell scholarship schemes have supported several thousands of students, many of whom have gone on to become Nigeria’s business, political and social leaders.
- In 2022, SPDC, SNEPCo and SNG invested over $5.6 million8 in education programmes. More than 3,000 secondary school grants, 3,500 university grants and 990 cradle-to-career scholarship grants have been awarded since 2016.
- SNEPCo constructed, furnished and delivered a 100-seat ICT Centre, at the Federal University of Petroleum Resources Effurun (FUPRE), Delta state in 2022.
- SNEPCo continued the construction of two educational infrastructure projects valued at $15 million:
- A $10 million Geosciences Centre of Excellence for the University of Lagos, and
- A $5 million e-library project for the Niger Delta University, Bayelsa state.
SPILLS AND CLEAN-UP
SPDC is working to eliminate spills from its operational activities, remediate past spills and prevent spills caused by crude oil theft, sabotage of pipelines or illegal oil refining. While SPDC operates to the same technical standards as other Shell companies globally, illegal activities continue to inhibit a normal operating environment. Regardless of the cause of a spill, we clean up and remediate areas affected by spills originating from our facilities.
- SPDC operational spills9: In the Niger Delta, over the last 12 years, the total number of operational hydrocarbon spills and the volume of oil spilled from them into the environment has been significantly reduced. In 2022, 10 incidents, each of over 100 kilograms of crude oil, were reported compared with nine incidents in 2021. The volume of around 0.01 thousand tonnes was less than the 0.03 thousand tonnes recorded in 2021.
- Spills from illegal activities: In 2022, about 88% of the oil spills of more than 100 kilograms from the SPDC operated facilities were caused by the illegal activities of third parties – 75 incidents with volume of 0.6 thousand tonnes, compared with 106 incidents in 2021, with volume of 3.3 thousand tonnes. The decreased number of incidents in 2022 correlates with a shutdown of production for about six months because of an unprecedented increase in crude oil theft from the TNP, which is operated by SPDC on behalf of the SPDC JV partners.
- In 2022, SPDC successfully remediated an additional 230 sites, compared to 187 sites remediated in 2021. Since 2016, 776 sites have been remediated.
- Most oil spills in the Niger Delta region continue to be caused by crude oil theft, the sabotage of oil and gas production facilities, and illegal oil refining, including the distribution of illegally refined products. Illegal connections continued to be a challenge. A total of 468 illegal connections were removed from SPDC’s pipelines in 2022 compared to 195 in 2021. Illegal connections are identified by daily inspections from the air and on the ground.
- SPDC has an ongoing work programme to appraise, maintain and replace key sections of pipelines and flow lines, to reduce the number of operational spills and enhance the integrity of the pipelines. In 2022, around 27 kilometres of pipelines and flow lines have been replaced. This work is organised through a proactive pipeline and flow line integrity management system. The system installs barriers where necessary, and recommends when and where pipeline sections should be replaced to prevent failures.
- By the end of 2022, a total of 311 new steel cages were installed around critical infrastructure nodes, including 38 that had been upgraded with CCTV. This compared to a total of 283 installed cages at the end of 2021. In 2022, out of 732 registered attempts to breach them, only 47 were successful.
RESPONSE AND REMEDIATION
- In 2022, the time needed to complete the recovery of free-phase oil – oil that forms a separate layer and is not mixed with water or soil – remained at around one week. This is the average time it takes to safely access a damaged site, initiate containment to prevent further spread of the spill, and start joint investigation visits with regulators, affected communities, and in some cases with NGOs.
- Closer engagement with communities has helped SPDC to access spill locations more quickly, meaning on average that joint investigations into the cause of a spill began within two days in 2022 compared to six days in 2016.
- Regardless of the cause of a spill, SPDC cleans up and remediates areas affected by spills originating from its facilities. With operational spills, it pays compensation to affected people and communities.
- SPDC continues to transparently publish details of every oil spill joint investigation visit. In 2023, in response to stakeholder requests, videos – where available – were added to the subsequent reports10 and photographs.
OGONILAND: COMMITMENT TO THE UNITED NATIONS ENVIRONMENT PROGRAMME (UNEP)
SPDC is working with the relevant stakeholders to implement the 2011 UNEP report in Ogoniland.11
- The clean-up efforts within Ogoniland are led by the Hydrocarbon Pollution and Remediation Project (HYPREP), an agency established by the Federal Government of Nigeria. The UNEP report12 had recorded 67 sites, of which two were classified as waste sites without hydrocarbon pollution. This left 65 sites to be remediated, with all completed sites to be certified by the National Oil Spill Detection and Response Agency (NOSDRA).
- In 2021, remediation and certification was completed at nine sites, and work on a further 11 sites continued. In 2022, remediation of another nine sites and certification of four was completed by HYPREP. Work on the outstanding two sites continued into 2023.
- In addition, in 2022, NOSDRA certified that – in contrast to the original UNEP report – remediation was not required for 13 sites. Field work is expected to commence in 2023 for 17 sites. For the remaining 15 sites, contracts were awarded by HYPREP in 2022 and remediation plans are being developed.
- The UNEP report recommended creating an Ogoni Trust Fund (OTF) with $1 billion capital, to be co-funded by the Federal Government of Nigeria, SPDC and other operators in the area. The SPDC Joint Venture, remains fully committed to contributing $900 million to the OTF as its share over five years. SPDC JV contributed the first installment of $180 million in July 2018 and released the second installment of $180 million in 2019. HYPREP did not request the release of any funds in 2020. In 2021, HYPREP requested the release of funds for 2020 and 2021 ($360 million). SPDC JV paid $212 million in 2022, which brought the total contribution to the OTF by the SPDC JV to $572 million at the end of 2022.
BODO CLEAN-UP PROCESS
- By the end of 2022, remediation work was completed on more than 87% of around 1,000 hectares that had been designated for clean-up (vs. about 60% as at the end of 2021) by the Bodo Mediation Initiative13. Remediation is expected to be completed by the end of the third quarter of 2023.
- The planting of mangrove seedlings (phase 3) started in 2021. Around two million mangrove seedlings need to be planted and survive to 2025 to achieve the project’s goal. At the end of 2022, close to 340,000 seedlings had been planted. NOSDRA had completed the certification for the planting on about a third of the 722 hectares that had been remediated.
1 This is a Shell-only statutory contribution, exclusive of our partners’ share.
2 Energy connection is defined as when a customer, household or business is connected to power supply via an off-grid source. This is measured on a scale of MW generation capacity. All On connections are produced from 4 broad categories: solar energy systems, solar assembly, cold storage and mini-grids.
3 The total contribution of SPDC, SNEPCo & SNG was $34.29 million. The Shell-only contribution was $11.37 million.
4 The phrase ‘closed out’ as used in this context means that the GMoUs are no longer and shall no longer be functional in compliance to the Petroleum Industry Act (PIA) 2021. Therefore, outstanding tranche payments due to communities in the GMoU shall be transited to the Host Communities Development Trust (HCDTs).
5 Host Communities Development Trust funds require a Settlor (a holder of an interest in a petroleum prospecting license or a petroleum mining lease whose area is located or appurtenant to any community or communities) to make an annual contribution to the applicable community of 3% of its actual operating expenditure of the preceding year in the upstream petroleum operation affecting the community.
6 The total contribution of SPDC & SNEPCo was $56.13 million. The Shell-only contribution was $20.19 million.
7 Following the handover of OML 11 to the government by SPDC in 2022, the total number of healthcare centres reduced from 19 in 2021 to 17 in 2022.
8 The total contribution of SPDC, SNEPCo & SNG was $5.6 million. The Shell-only spend was $2.37 million.
9 Read more on spill prevention and response in Nigeria at www.shell.com.ng/environment.
12 SPDC remains committed to the implementation of the 2011 United Nations Environment Programme (UNEP) Report on Ogoniland which assessed contamination from oil operations in the region and recommended actions to clean it up.
13 The clean-up process is overseen by an independent body called the Bodo Mediation Initiative.