Shell Opposes Nigeria's pending Petroleum Industry Bill (PIB)
States Nigerian federal government Generated N7trn in 6 years
As the debate over the Petroleum Industry Bill (PIB) rages on, the Shell Petroleum Development Company (SPDC) has reiterated its opposition to the reform bill, insisting that the Federal Government earned N7trillion from deep-water operations in the last six years under the current fiscal regime.
Speaking at a recent economic summit in Abuja, the Managing Director of SPDC, Mr. Mutiu Sunmonu, stated that the perception that the Federal Government was not making enough money under the current fiscal regime was wrong.
“There is a perception out there that government is not making money from deep water operations; that the multinationals are raking it in from the deep-water.”
“Up to 2011 government had made about $46 billion from deep-water. The multinationals spent $46 billion, because in deep-water, the multinationals put up all the investment; government does not put up any investment. So the multinationals put up the $46 billion and they have also realised about $11 billion but government has realised about $46 billion, so it is not true that government is not making any money from deep water operations,” he continued.
He said there was the need to strike a balance between the government and the industry take to enhance investment.
Reacting on behalf of the Nigerian National Petroleum Corporation (NNPC), the Group Executive Director, Exploration and Production, NNPC, Mr. Abiye Membere said for the International Oil Companies (IOCs) to regard the $46 billion expenditure in the deep-water concessions as revenue that was realised by the Federal Government, while the IOCs realised $11 billion, was grossly misleading.
“There is no way somebody who takes 80 per cent profit share will get $11 billion out of a $46 billion business,” he said.
Shell which operates the joint venture had earlier said it paid about $38 billion, about N5.92 trillion, to the Federal Government between 2007 and 2011. The joint venture comprises the NNPC, 55 per cent; Royal Dutch Shell, 30 per cent; Elf Petroleum Nigeria Limited – a subsidiary of Total, 10 per cent, and Agip, 5 per cent.
SPDC said in a recent report posted on its website that the Federal Government receives about 95 per cent of the revenue, after costs from the SPDC operated joint venture. Shell also said that the Shell Nigeria Exploration and Production Company, (SNEPCo) – which operates its offshore business in deepwater in Nigeria – had paid $6billion, about N936 billion, in taxes and royalties over the last five years.