Shell contributes N5.23trn to FG’s revenue •To boost power supply
Written by Samuel Ibiyemi, Lagos
Thursday, 17 June 2010
SHELL companies in Nigeria have announced the contribution of $35 billion (about N5.25 trillion) to annual oil revenue of the Federal Govern-ment between 2005 and 2009 and invested $2 billion in domestic gas projects needed to improve electricity generation in the country.
Also, in order to check poverty in the Niger Delta, Shell has received approval for $250 million (about N37.5 billion) as annual expenditure and berated critics over the comparison of oil spills in the Niger Delta to the Gulf of Mexico.
The Federal Government had predicted that domestic demand for gas would rise five-fold to 5 billion cubic feet (bcf) per day by 2013 as a result of ongoing power projects designed to generate electricity at gas-fired power stations.
The chairman of Shell Companies in Nigeria, Mr. Mutiu Sunmonu, disclosed in Lagos, on Wednesday, that his company’s revenue contribution to the Federal Government represented the highest by any single company in Nigeria during the period despite significant drop in crude oil production from over one million barrels per day (mbpd) in 2006 to 630,000bpd in 2009.
According to him, the contribution was made possible from its operations as a result of the existing fiscal arrangement making the Federal Government to take 95 per cent of the expected revenue from every barrel of oil produced per day.
“Frustrated by the lack of benefits from oil revenue, communities in the Niger Delta have continued to target the operations of Shell Petroleum Development Company (SPDC) demanding better public services and a greater share of government revenues,” he said.
Sunmonu, who is also the Managing Director of SPDC, announced that the company’s investment of $2 billion in domestic gas projects was designed to increase gas production to help meet growing domestic energy demand and support economic growth.
For instance, he said that work was progressing on the Gbaran-Ubie integrated gas and oil project expected to produce one billion standard cubic feet of gas per day and more than 70, 000 barrels of oil per day on completion of the phase one.
“New pipelines will deliver a portion of that gas to generate power in the Niger Delta-supporting development in the region. It is expected to supply the Bayelsa State power plant at Imiringi and a new 225 megawatts power plant that the Federal Government is building under the National Integrated Power Project (NIPP) at Gbaran in Bayelsa State,” he noted.
Industry analysts believe that increase in gas supply to the power stations of PHCN will help to raise the daily generation to 6,000mw planned target of the Federal Government.
It will also help to boost the implementation of new power reform initiated by President Goodluck Jona-than in Abuja, on Tuesday.
Sunmonu, however, expressed disappointment with the way Nigerians were comparing oil spills in the Niger Delta with the Gulf of Mexico with higher production of crude oil per well.
For instance, he said oil spills were frequent in the onshore and swamp areas in the Niger Delta as a result of vandalism and not equipment failure, though most of the wells were producing below 5,000 bpd compared with 50,000 bpd in the Gulf of Mexico.
“We cannot compare oil spills in the Niger Delta with the Gulf of Mexico, because greater portion of the spills were contributed by vandals on abandoned wells and, in particular, in Ogoniland, Bayelsa State,” he said.
Using SPDC as an example of cases of oil spills, he said oil spills had reduced significantly in Nigeria as a result of the amnesty programme initiated by the Federal Government in 2009.
“The total number of spills in 2009 was 132, against the average between 2005 and 2009 of 175 per year.
“Thieves or saboteurs spilled about 103,000 barrels from SPDC facilities in 95 incidents, with an average of one spill every four days.
“This accounted for almost 98 per cent of the volume of oil spilled during the year,” he said.
On domestic gas supply for power generation, Sunmonu said the company had signed a multi-million dollar pipeline contract with Daewoo to enable the SPDC JV partners to supply more gas to power stations in the country.
The contract, he said, would involve the construction of pipelines that would take gas from SPDC-operated JV fields to the domestic network owned and operated by the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
“On completion of the project, the pipelines are expected to deliver some 250 million cubic feet of gas per day,” he said.
He added that the Afam VI power plant and the Okoloma gas plant in Rivers State had started generating 450mw to the national grid out of 650mw contained in the project’s plan.
The plant, which according to him, was inaugurated in July 2009, had supplied over 2.5 million megawatts of electricity to the national grid.
“Today, Shell has the biggest private power plant contributing 20 per cent of the nation’s electricity generation capacity per day. We are proud to support the Federal Government in its efforts to provide more energy for Nigerians,” he said.
He lamented that there remained many challenges to the gas industry in Nigeria and to the implementation of the Nigerian Gas Master Plan.
He said lack of funding had stalled many projects designed to capture associated gas and to reduce flaring, adding that security concerns continued to delay gas and other projects onshore in the Niger Delta.
Regardless of the daunting challenges, Sunmonu announced that the company had raised its annual expenditure on poverty reduction by 500 per cent from $50 million to $250 (about N37.5 billion) annually.
In 2009, he said Shell JV operations contributed over $156.5 million ($555.3 million Shell share) to the Niger Delta Development Commission (NDDC) as required by law.
“In the same year, operations run by SPDC contributed an additional $57.7 million ($18 million-Shell share) directly to development projects which focused on a range of activities, including small business and agriculture, training education, health care and capacity building,” he added.
Written by Samuel Ibiyemi, Lagos
Thursday, 17 June 2010
SHELL companies in Nigeria have announced the contribution of $35 billion (about N5.25 trillion) to annual oil revenue of the Federal Govern-ment between 2005 and 2009 and invested $2 billion in domestic gas projects needed to improve electricity generation in the country.
Also, in order to check poverty in the Niger Delta, Shell has received approval for $250 million (about N37.5 billion) as annual expenditure and berated critics over the comparison of oil spills in the Niger Delta to the Gulf of Mexico.
The Federal Government had predicted that domestic demand for gas would rise five-fold to 5 billion cubic feet (bcf) per day by 2013 as a result of ongoing power projects designed to generate electricity at gas-fired power stations.
The chairman of Shell Companies in Nigeria, Mr. Mutiu Sunmonu, disclosed in Lagos, on Wednesday, that his company’s revenue contribution to the Federal Government represented the highest by any single company in Nigeria during the period despite significant drop in crude oil production from over one million barrels per day (mbpd) in 2006 to 630,000bpd in 2009.
According to him, the contribution was made possible from its operations as a result of the existing fiscal arrangement making the Federal Government to take 95 per cent of the expected revenue from every barrel of oil produced per day.
“Frustrated by the lack of benefits from oil revenue, communities in the Niger Delta have continued to target the operations of Shell Petroleum Development Company (SPDC) demanding better public services and a greater share of government revenues,” he said.
Sunmonu, who is also the Managing Director of SPDC, announced that the company’s investment of $2 billion in domestic gas projects was designed to increase gas production to help meet growing domestic energy demand and support economic growth.
For instance, he said that work was progressing on the Gbaran-Ubie integrated gas and oil project expected to produce one billion standard cubic feet of gas per day and more than 70, 000 barrels of oil per day on completion of the phase one.
“New pipelines will deliver a portion of that gas to generate power in the Niger Delta-supporting development in the region. It is expected to supply the Bayelsa State power plant at Imiringi and a new 225 megawatts power plant that the Federal Government is building under the National Integrated Power Project (NIPP) at Gbaran in Bayelsa State,” he noted.
Industry analysts believe that increase in gas supply to the power stations of PHCN will help to raise the daily generation to 6,000mw planned target of the Federal Government.
It will also help to boost the implementation of new power reform initiated by President Goodluck Jona-than in Abuja, on Tuesday.
Sunmonu, however, expressed disappointment with the way Nigerians were comparing oil spills in the Niger Delta with the Gulf of Mexico with higher production of crude oil per well.
For instance, he said oil spills were frequent in the onshore and swamp areas in the Niger Delta as a result of vandalism and not equipment failure, though most of the wells were producing below 5,000 bpd compared with 50,000 bpd in the Gulf of Mexico.
“We cannot compare oil spills in the Niger Delta with the Gulf of Mexico, because greater portion of the spills were contributed by vandals on abandoned wells and, in particular, in Ogoniland, Bayelsa State,” he said.
Using SPDC as an example of cases of oil spills, he said oil spills had reduced significantly in Nigeria as a result of the amnesty programme initiated by the Federal Government in 2009.
“The total number of spills in 2009 was 132, against the average between 2005 and 2009 of 175 per year.
“Thieves or saboteurs spilled about 103,000 barrels from SPDC facilities in 95 incidents, with an average of one spill every four days.
“This accounted for almost 98 per cent of the volume of oil spilled during the year,” he said.
On domestic gas supply for power generation, Sunmonu said the company had signed a multi-million dollar pipeline contract with Daewoo to enable the SPDC JV partners to supply more gas to power stations in the country.
The contract, he said, would involve the construction of pipelines that would take gas from SPDC-operated JV fields to the domestic network owned and operated by the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC).
“On completion of the project, the pipelines are expected to deliver some 250 million cubic feet of gas per day,” he said.
He added that the Afam VI power plant and the Okoloma gas plant in Rivers State had started generating 450mw to the national grid out of 650mw contained in the project’s plan.
The plant, which according to him, was inaugurated in July 2009, had supplied over 2.5 million megawatts of electricity to the national grid.
“Today, Shell has the biggest private power plant contributing 20 per cent of the nation’s electricity generation capacity per day. We are proud to support the Federal Government in its efforts to provide more energy for Nigerians,” he said.
He lamented that there remained many challenges to the gas industry in Nigeria and to the implementation of the Nigerian Gas Master Plan.
He said lack of funding had stalled many projects designed to capture associated gas and to reduce flaring, adding that security concerns continued to delay gas and other projects onshore in the Niger Delta.
Regardless of the daunting challenges, Sunmonu announced that the company had raised its annual expenditure on poverty reduction by 500 per cent from $50 million to $250 (about N37.5 billion) annually.
In 2009, he said Shell JV operations contributed over $156.5 million ($555.3 million Shell share) to the Niger Delta Development Commission (NDDC) as required by law.
“In the same year, operations run by SPDC contributed an additional $57.7 million ($18 million-Shell share) directly to development projects which focused on a range of activities, including small business and agriculture, training education, health care and capacity building,” he added.
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