Portfolio sea eagle

The year 2018 marks Shell’s 60-year history in Nigeria. Shell remains committed to the country and to supporting the Government of Nigeria in their plans for the oil and gas sector. Its companies in Nigeria, broadly referred to as Shell Companies in Nigeria, have played a pioneering role in onshore, shallow and deep-water oil exploration and production. They are also at the forefront of gas development, producing and delivering gas to domestic consumers and the export market for more than 50 years.

Shell Interests in the Nigerian Oil & Gas Sector:

  • The Shell Petroleum Development Company of Nigeria Limited (SPDC) onshore and shallow water oil and gas; operator and 30% shareholder in the SPDC Joint Venture
  • Shell Nigeria Exploration and Production Company Limited (SNEPCo) deep water oil and gas; operator of Bonga Field (55% Shell share) and Bonga floating production, storage and offloading (FPSO) vessel
  • Nigeria Liquefied Natural Gas Company Limited (NLNG) LNG joint venture (25.6% Shell share)
  • Shell Nigeria Gas Limited (SNG) domestic gas distribution; 100% Shell share

Shell Companies in Nigeria continue to strengthen their position in the country for the long term by optimising their onshore oil footprint while making investments in other areas, particularly deep water and the gas value chain, including domestic gas. Natural gas is the cleanest burning fossil fuel and is abundantly available in Nigeria. Shell Companies in Nigeria are working with the Federal Government of Nigeria and other partners on domestic gas opportunities both onshore and in shallow water and advancing Liquefied Natural Gas (LNG) for export.

Shell has the following business interests in the Nigerian oil and gas sector:

The Shell Petroleum Development Company of Nigeria Limited (SPDC)

SPDC is the largest Shell company in Nigeria and produced the country’s first commercial oil exports in 1958 in Oloibiri, Bayelsa State. SPDC is the operator of a joint venture (the SPDC JV) between the government-owned Nigerian National Petroleum Corporation – NNPC (55% share), SPDC (30%), Total E&P Nigeria Ltd (10%) and the ENI subsidiary Nigerian Agip Oil Company Limited (5%). It is focused on onshore and shallow water oil and gas production in the Niger Delta.

The SPDC JV’s assets include:

  • Around 1,400 operated oil and gas wells
  • A network of approximately 4,000 kilometers of oil and gas pipelines and flowlines
  • Nine gas plants and two major oil export terminals (Bonny and Forcados)
  • One power plant (Afam VI).

Shell Nigeria Exploration and Production Company Limited (SNEPCo)

SNEPCo was incorporated in 1993 to develop Nigeria’s deep- water oil and gas resources. It is a 100% Shell-owned company and holds interests in four deep-water blocks, under the terms contained in a Production Sharing Contract (PSC). SNEPCo operates OML-118 (including the Bonga field, Shell interest 55%) and OML-135 (Bolio and Doro, Shell interest 55%). SNEPCo also has a 50% interest in OPL-2451 (Zabazaba, Etan), which is operated by the ENI subsidiary Nigerian Agip Exploration Limited and a 43.75% interest in OML-133 (Erha) operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited.

  • Bonga was Nigeria’s first oil and gas project in water depths over 1,000 metres
  • It increased Nigeria’s oil production capacity by 10% when it began producing in 2005
  • The Bonga floating production, storage and offloading (FPSO) vessel has a total production capacity of 225,000 barrels of oil per day and 210 million standard cubic feet of gas per day
  • Bonga helped create the first generation of Nigerian oil and gas engineers with deep water experience and stimulated the growth of support industries.

Nigeria Liquefied Natural Gas Company Limited (NLNG)

NLNG is a joint venture incorporated in 1989 to produce LNG and natural gas liquids for export. It was Nigeria’s first LNG project. Shell holds a 25.6% share, and its partners are NNPC (49%), a subsidiary of Total E&P (15%) and an ENI subsidiary (10.4%).

  • The NLNG plant at Bonny Island has six processing units (trains) with total processing capacity of 22 million tonnes a year of LNG and up to 5 million tonnes of natural gas liquids (LPG and condensate) from 3.5 billion standard cubic feet per day of natural gas
  • Plans for building a seventh train (train 7) that will increase the total production capacity to 30 million tonnes a year of LNG are currently in progress
  • NLNG accounted for approximately 7% of the world’s total LNG production capacity in 2017
  • NLNG is serviced by a fleet of 23 LNG vessels including six new vessels constructed in South Korea
  • LNG cargos are shipped to Atlantic Basin countries such as Spain, France, Italy, Turkey, Mexico and the US, as well as markets in Asia.

Shell Nigeria Gas Limited (SNG)

SNG was incorporated in 1998 to promote gas as a more reliable, cleaner and cost-effective alternative to liquid fuels for the Nigerian domestic market. It is a 100% Shell-owned company.

  • The first and so far, only wholly-owned subsidiary of an international oil company involved in domestic gas distribution in Nigeria
  • SNG operates a pressure reduction and metering station, and a gas transmission and distribution network of approximately 125 kilometers that distribute natural gas to about 90 industrial and commercial customers, majority of which are in Ogun, Abia, and Rivers States of Nigeria
  • The company’s employees are all Nigerian and SNG is the only gas distribution company in Nigeria whose facility is ISO 14001 Certified.

1 - The authorities in various countries are investigating allegations of bribery and corruption over Shell’s investment in Nigerian oil block OPL 245 and the associated 2011 settlement of litigation. In Italy, Shell and four former Shell employees were remanded to trial commencing in May 2018. We are disappointed by this decision but we believe the trial judges will conclude that there is no case against Shell or its former employees.

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Economic contribution

Shell Companies in Nigeria are major contributors 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.