Shell Companies in Nigeria : Entrepreneurship, value and growth
The story of contemporary Nigeria can never be meaningfully told without a dedicated commentary on the entrepreneurial contributions of Shell Companies in Nigeria(SCiN) to the country’s economic structure and foundations and her revenue base. It is an unparalleled historic achievement that Shell Petroleum Development Company (SPDC) was the first International Company (IOC) to discover and produce crude oil in Nigeria from the Oloibiri field in 1958. This feat will continue to resonate all through the existence of the country.
Today thanks to the remarkable pioneering entrepreneurial courage exhibited by Shell in Nigeria the country is now one of the major oil producers in the world with oil and gas exports contributing about 90 per cent of her export income and about 75 per cent of government revenue.
Though the activities of oil thieves and saboteurs have in recent years impacted negatively on Shell’s oil exploration and producing activities, its oil operations are undoubtably massive in Nigeria.In 2013 alone, Shell operated ventures in the country produced an average of 693,000 barrels per day. Of this, 535,000 barrels came from the activities of SPDC joint venture, while 158,000 barrels were from the operations of Shell Nigeria Exploration and Production Company of Nigeria(SNEPCO).
In the first quarter of this year, the Nigeria Liquefied Natural Gas (NLNG) Limited which came on board in 1989 as s joint venture with Shell being the second highest shareholder with 25.6 per cent shareholder following NNPC(49%) marked its 3000th cargo delivery showing Shell’s commitment and value to Nigeria’s oil and had sector. Aside from Shell’s NLNG involvement, it is the only IOC with a dedicated domestic gas company, Shell Nigeria Gas(SNG).
One other area in which the SCiN have shown remarkable entrepreneurial courage is in its foray into deep water production in 2005 from the Bonga Floating Production, Storage and Offloading(FPSO). This operation by SNEPCo was at a time contributing up to 10 per cent of the counyry’s oil export. Through this deep water operations SNEPCo has contributed over 26 billion US dollars in the last five years. Similarly, the joint venture operated by SPDC has contributed about 44 billion US dollars to the government between 2009 and 2013.
Beyond the direct contributions of SCiN in the oil and gas sector and the revenue implications of such, Shell operations especially that of SPDC and SNEPCo employs up to 4000 persons of which 95 per cent are Nigerians and many thousands of contractors that consequently provide employment for many more. In 2013, SCiN awarded 91 per cent of their total number of contracts to Nigerian companies.
The contributions of SCiN to the development of the Nigerian society is equally significant. Between 2009 and 2013 SCiN contributed a total of 703 million US dollars as Education tax. There is equally a huge contribution towards community development in the Niger delta region singularly and also in partnership with Niger Delta Development Company(NDDC). In 2013, Shell operations committed over 180 million US dollars to development projects in the Niger Delta.
The SCiN through their mammoth operations in the oil and gas sector and their huge contributions to revenues, employment creation and overall well being of the Nigerian populace have indeed proven to be distinguished worthy development partners in Nigeria.