By Ndubuisi Micheal Obineme
In 2018, Shell marked 60 years history in Nigeria playing a key role in onshore, shallow and deep-water oil exploration and production. Shell has a strong working partnership with the Federal Government of Nigeria, local and international companies, investors, contractors and communities to develop the country’s oil and gas sector. The company has a consistent track record of producing and delivering natural gas to domestic consumers and the export market for nearly 55 years.
The Shell Petroleum Development Company of Nigeria (SPDC)
The Shell Petroleum Development Company of Nigeria (SPDC), focuses on onshore and shallow water oil and gas exploration, production and supply in Nigeria Delta region.
SPDC produced the country’s first commercial oil exports in 1958 from Oloibiri, Bayelsa State. Operator of a joint venture 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%).
The SPDC JV’s assets include; up to 1,200 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 (VI).
SPDC was awarded the Local Content Operator of the Year 2018 by the Petroleum Technology Association of Nigeria (PETAN). This marks the third time Shell Companies in Nigeria have won the PETAN award, having been conferred the same award in 2013 and 2015.
Shell Nigeria Exploration and Production Company Limited (SNEPCO)
SNEPCO holds interests in four deepwater blocks, three of which are under the terms contained in a Production Sharing Contract. It operates OML-118 (including the Bonga field, 55% interest) and OML-135 (Bolia and Doro, 55% interest) and holds 43.75% interest in OML-133 (Erha) operated by the ExxonMobil subsidiary Esso Exploration and Production Nigeria (Deepwater) Limited.
SNEPCO seperately holds 50% interest in OPL-245 (Zabazaba, Etan), which is operated by the ENI subsidiary Nigerian Agip Exploration Limited, under a Production Sharing Agreement.
The Shell Nigeria Exploration and Production Company’s deepwater production comes from the Bonga and Erha fields which accounted for 15% of Nigeria’s total oil production in 2018. This translates to 37% of Nigeria’s deep water production in 2018. SNEPCO was established in 1993 and carries out Shell Companies in Nigeria’s offshore activities.
Over the years, SNEPCO’s exploration activities have resulted in the discovery of several significant oil and gas resources including the Bonga, Bolia, Zabazaba and Doro fields.
Country Chairman of Shell Companies in Nigeria, Osagie Okunbor, commented: “Through 2018 we continued to produce crudeoil and natural gas, distribute gas to industries and for domestic power generation and produce Liquefied Natural Gas for export, which generated revenues for the government. The companies also contribute social investment in communities and indigenous companies.”
“In 2019, we will continue to cement our place as a valued partner by maintaining our close collaboration with our joint venture partners, host communities, the tiers of government in Nigeria and other stakeholders to further contribute towards the drive for sustained economic growth in Nigeria”
Shell companies also fund and implement community development and social investment programmes that have a lasting impact on people’s lives in the Niger Delta and Nigeria as a whole.
Shell Companies in Nigeria are major contributors to the country’s economy and people. The oil and natural gas they produce and supply generate taxes, royalties and levies paid to the Federal Government of Nigeria (FGN).
$17.8 billion (N4.62 trillion)
Economic contribution such as taxes, royalties and levies from SPDC JV parties to the Nigerian government between 2014-2018.
$2 billion (N375.16 billion)
Funds contributed from SPDC JV parties, SNEPCO and its co-ventures to the Niger Delta Development Commission (NDDC) since inception in 2002.
13% of grid-connected electricity was supplied by SPDC JV Afam VI power plant in 2018
92% of Shell Companies in Nigeria contracts awarded to Nigerian companies in 2018
617,000 barrels of oil equivalent per day: average daily production by Shell-operated ventures in Nigeria in 2018.
$239 million (N44.36 billion)
Social investment funds disbursed for community-driven projects under the Global Memorandum of Understanding (GMOU) structure by SPDC JV since inception in 2006.
$62 million (N15.05 billion)
Funds committed by Nigeria LNG to social investment projects between 2013-2018 (Shell share $16 million (N3.88 billion).
In 2018, approximately 10% of the country’s domestic gas was supplied by the SPDC JV, most of which was used for power generation.
Around 13% of the nation’s grid connected electricity was supplied by the SPDC JV via the Afam VI power plant, which has a 650-megawatt generating capability.
About 100 industrial and commercial customers majority of which are in Ogun, Rivers and Abia States, were supplied natual gas from Shell Nigeria Gas Limited (SNG) used for power generation and processing by industries for the manufacture of domestic products ranging from household consumables, to household utensils and hardware.
Around $1.3 billion (N393.94 billion) was spent by Shell Companies in Nigeria on contracts with Nigerian companies in 2018.
Other Shell Companies in Nigeria continue to play a crucial role in the natural gas energy mix. The Bonga deepwater field operated by SNEPCO produces gas that is piped from the Bonga floating production, storage and offloading facility to the NLNG joint venture plant on Bonny Island where it is cooled to produce LNG for export to consumers around the world.
Through its 25.6% interest in the NLNG joint venture, Shell has since the early 1990s played a key role in Nigeria’s emergence as a global player in LNG.
SNG currently supplies natural gas to more than 100 industrial and commercial customers, mostly in Ogun, Abia, and River States driving industrialization, providing employment for the skilled and unskilled local population in addition to directly improving internally generated revenues in these states.
Among its customers are four compressed natural gas companies that make the gas available to other companies outside the SNG local pipeline network.
In 2018, SNG increased its gas distribution capacity by 150% following the safe completion of its 2nd gas train as part of the Agbara Capacity Increase Project.
At full capacity utilization, over 400MW equivalent of energy will be directly supplied to industrial plants and manufacturing companies.
SNG staff is 100% Nigerian and the company is the only gas distribution company in Nigeria whose facility is ISO 14001 Certified.