Economic development in Nigeria
Special report
Shell has interests in several companies in Nigeria that produce and distribute oil, gas and other energy products. This energy contributes to economic growth in the Niger Delta and across the country. The businesses in which Shell has interests employ 2,700 people directly and provide jobs for many others in supplier networks.
Shell employees work closely with communities, contractors, joint-venture partners and federal and state government agencies to seek to create a safe operating environment and help improve the quality of life for Nigerians.
The Nigeria LNG joint venture’s expansion project is expected to create about 12,000 direct jobs during construction.
Shell companies in Nigeria also contribute to community health, education and enterprise programmes, supporting the development of Nigerians and indigenous companies. In 2020, Shell launched measures to help protect employees from the COVID-19 virus and made additional contributions to communities. This work included setting up food programmes at seven COVID-19 isolation sites and providing testing kits, medical equipment, sanitiser and personal protective equipment to nine states.
The Nigerian government aims to power economic growth by focusing on developing oil and gas resources, investments in infrastructure and expanding access to energy for Nigerians.
In 2020, the Shell Petroleum Development Company of Nigeria Ltd (SPDC), the operator of the SPDC Joint Venture (Shell interest 30%), continued to focus on restoring and maintaining wells and pipelines in the Niger Delta to rejuvenate oil and gas production, which decreased by 2% in 2020 compared with 2019.
SPDC is also building facilities to gather gas that would otherwise be flared. Since 2002, SPDC’s flaring in Nigeria has been reduced by 90%. Gas that was once flared is now captured and processed to supply domestic and international gas markets.
An example of this gas-gathering work is the Southern Swamp Associated Gas Solutions project, which was commissioned in 2020. SPDC is planning to reduce associated gas flaring further through its Forcados Yokri gas-gathering project, a significant part of which is expected to be completed in 2021.
Unlocking the oil and gas resources in the deep waters of the Gulf of Guinea can also help meet growing energy demand in Nigeria and international markets. Shell works with local Nigerian companies and develops the skills and experience of Nigerian employees. The Shell Nigeria Exploration and Production Company (SNEPCo) uses its knowledge, experience and proven deep-water technologies to unlock new resources safely and efficiently.
Developing gas infrastructure
Shell Gas B.V. and its partners in Nigeria LNG Limited (Shell interest 25.6%) took a final investment decision in 2020 on a new LNG processing unit. The expansion is expected to create around 12,000 jobs during construction and stimulate growth of the local oil and gas services sector. Once operational, the new unit, known as Train 7, will add around 8 million tonnes per annum (mtpa) of capacity to the Bonny Island facility, taking the total to around 30 mtpa. Construction is expected to take a number of years.
In 2020, Shell Nigeria Gas, which provides gas to industrial and commercial customers in Nigeria, completed its 20-kilometre domestic gas pipeline expansion project in Abia State in south-eastern Nigeria. The pipeline connects three key industrial zones and supplies gas to a consortium providing electricity to the Ariaria market. The market is one of the largest leather-shoe-making and open-stall markets in West Africa, with more than 37,000 shops and around 1 million traders.
Shell Nigeria Gas has also started building a large gas processing plant in the city of Aba, Abia State, and announced its intention to further develop domestic gas infrastructure in Oyo State. Progress also continued to be made on SPDC’s Assa North-Ohaji South project, which is expected to be the largest gas facility in Nigeria.
Contribution to society
Shell’s Nigerian businesses support the development of local communities and companies. In 2020, Shell companies awarded contracts worth more than $0.8 billion to Nigerian-registered businesses and contributed $49.4 million in social investment projects, mainly in enterprise support, education, health care and road safety. $18.6 of this spend was made on COVID-19-related interventions.
In 2020, Shell paid $0.9 billion of royalties and corporate taxes to the Nigerian government (SPDC $0.4 billion; SNEPCo $0.5 billion).
We run various health care projects in Nigeria, often in partnership with local authorities or development bodies. In some locations, such as the Obio community in Rivers State, access to health care is provided through a community health insurance scheme set up in 2010 by the SPDC JV, Rivers State government and the local communities. Since 2010, more than 75,000 people have enrolled.
The Obio Cottage Hospital in Port Harcourt is one of the most visited health facilities in the region.
The Nigerian National Petroleum Corporation (NNPC) and SPDC have also trained more than 1,500 health workers since 2013. In 2020, SNEPCo, in partnership with NNPC, donated a fully equipped, 20-bed medical centre to Ogun State.
Enterprise development, opportunities for education and access to affordable health care hinge upon being able to have reliable and affordable energy. Shell has provided seed funding for All On, a Nigerian not-for-profit company, which supports renewable off-grid energy start-ups to enable them to provide power to villages and communities outside the main cities and towns.
Visit www.shell.com.ng/nigeria-briefing-notes for more on Shell in Nigeria.
External voice
Damilola Ogunbiyi
United Nations
Damilola is the CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy. Both organisations are working to help ensure access to affordable, reliable, sustainable and modern energy for all, Goal 7 of the UN Sustainable Development Goals.
“When it comes to achieving Sustainable Development Goal 7, Nigeria is one of the most important countries globally. With the support of All On, Sustainable Energy for All is collaborating with Nigeria’s Rural Electrification Agency to develop a sustainable framework for the solar systems industry. Our collective effort in Nigeria shows how data, policy and finance working in unison can accelerate progress on this goal.”
Social and economic contribution of Shell companies in Nigeria
Jobs
People working for Shell, including more than 9,000 contractors
Local staff
Employees in 2020 who are Nigerian
Government revenue
Royalties and corporate taxes paid to the Nigerian government in 2020
(SPDC $0.4 billion; SNEPCo $0.5 billion)
Local suppliers
Value of contracts awarded to Nigerian companies
Health
Health-care projects supported by SPDC JV and SNEPCo
Education
University grants awarded by SPDC JV and SNEPCo since 2016
