5 things we learnt about Shell’s activities in Nigeria from its 2016 sustainability report
Royal Dutch Shell released its Sustainability report for 2016 recently. Below are some insights it offered about its operations in Nigeria
1. Nigeria, Malaysia and Iraq now account for 70 percent of gas flares
More than 70 percent of flaring from Shell-operated fields in 2016 occurred in Iraq, Nigeria, Malaysia and Qatar. New facilities brought online in Malaysia and Iraq have helped reduce flaring from 11.8 million tonnes of carbon (CO2) equivalent in 2015 to 7.6 million tonnes in 2016, including the additional fields added to their portfolio from the acquisition of BG in 2016.
Shell says it is working to bring additional gas gathering facilities online in Iraq and Nigeria to reach their goal of no routine flaring by 2030, while continuous improvement efforts will reduce operational flaring.
2. Crude theft and sabotage now chief drivers of oil spills in Niger Delta
A lot of environmental activists in the Niger Delta make their name from harassing oil companies in Nigeria due to oil spills. Some companies have been culpable in many but that may be changing.
According to Shell’s report, oil spills due to crude oil theft and sabotage of facilities, as well as illegal refining, now cause most of the environmental damage from oil and gas operations in the Niger Delta.
There were 71 operational oil spills in 2016, down from 108 in 2015. The volume of operational spills of oil and oil products in 2016 was 0.7 thousand tonnes, 11 percent less than in 2015.
The number of spills caused by sabotage and theft fell to 46 from 94 in 2015. The volume of these spills decreased to 1.4 thousand tonnes in 2016 from 2.2 thousand tonnes in 2015. In 2016, sabotage and oil theft remained a significant cause of spills in the Niger Delta, Nigeria.
3. Shell Nigeria is putting its money where its mouth is
In Nigeria, Shell created an independent, not-for-profit company to help establish the market for off-grid renewable energy in the country, known as All-On. Together with its partners, the company will provide investments and technical support to address energy poverty in unserved and underserved communities.
4. Niger Delta militants blew up more oil assets but actually stole less oil
Apparently they were more angry than hungry. Shell’s sustainability report states that theft of the SPDC JV’s crude oil from the pipeline network amounted to around 5.6 thousand barrels of oil per day (bpd) in 2016. This is a reduction from 25 thousand barrels per day in the previous year and is partly due to continued air and ground surveillance and anti-theft mechanisms on equipment. Since 2012, SPDC has removed more than 880 illegal theft points.
The number of sabotage-related spills in 2016 decreased to 45 from 93 in 2015. This was despite resurgence in attacks on oil and gas facilities in parts of the Niger Delta. Theft and sabotage caused 90 percent of spills of more than 100 kilograms from SPDC
JV pipelines.
5. Recorded significant contribution to the Nigerian economy
• $29 billion: economic contribution from the SPDC JV partners to the Nigerian government from 2012–2016.
• $1.4 billion: Shell share of royalties and corporate taxes paid to the Nigerian government in 2016 (SPDC $1billion; SNEPCo $0.4 billion).
• 94 percent: Shell Companies in Nigeria contracts awarded to Nigerian companies.
• $0.74 billion: Shell Companies in Nigeria spend on contracts awarded to Nigerian companies.
• 96 percent: employees of Shell Companies in Nigeria are Nigerian.
• $106.8 million: SPDC JV and SNEPCo contribution to Niger Delta Development Commission in 2016 (Shell share $48.5 million).
• $29.8 million SPDC JV, SNEPCo and Shell Nigeria Gas direct spending on social investment projects in 2016 (Shell share $10 million).
ISAAC ANYAOGU