Message from Country Chair of Shell Companies in Nigeria
In 2023 our teams worked to lay an even stronger foundation for solid performance. Focusing on performance, discipline and simplification, we delivered impressive results that make a true difference to our communities.
MESSAGE FROM THE COUNTRY CHAIR
The Nigeria Briefing Notes reflect the work of Shell Companies in Nigeria, the progress that we have achieved, and the contributions made to communities and the country in 2023.
In 2023, our teams worked to lay an even stronger foundation for solid performance. We have demonstrated that through our focus on performance, discipline and simplification, we can deliver impressive results. These benefit not just our shareholders but all our stakeholders and make a true difference to the lives of the communities in which we operate.
Let me share some of last year’s highlights.
Performance improvements
SNEPCo, our deep-water business, recorded improvement in availability and production at both Bonga, the operated asset, and Erha, the non-operated asset. This performance was driven by a combination of successful drilling, bringing on new oil wells, optimising reservoir and facility management, and achieving excellence in asset management. In fact, Bonga achieved its highest controllable availability since 2017.
By the end of 2023, SPDC increased its oil and gas production to circa 200kb/d and 1.4bscf/d respectively – a demonstration of the ongoing significant potential of the business.
We have worked in close collaboration with key stakeholders, including the Nigerian government and our partner Nigerian National Petroleum Company Limited (NNPC Ltd.), to reduce crude oil theft across our production and transmission infrastructure in the Niger Delta. SPDC also has anti-theft protection mechanisms for key infrastructure such as wellheads and manifolds. The programme to protect wellheads with steel cages continues to help deter theft. Other pipeline technologies have been introduced including specialised intelligent pigging and pipeline pressure monitoring. These have deterred illegal activities, prevented crude oil losses across the network and enabled an improvement in crude delivery through our joint venture pipelines to export terminals.
Regrettably, however, there were still spills, caused mostly by crude theft and other illegal activities affecting SPDC’s onshore operations. SPDC has continued to clean up these spills and to remediate the affected areas. Closer engagement with communities has helped us to access spill locations faster, minimising environmental impacts of such spills.
More reliable energy for Nigeria
SPDC has now approved the final investment decision for the construction of a dedicated upstream facility to supply 100 million standard cubic feet of gas per day (MMScF/d) from the Iseni field to the Dangote Fertiliser and Petrochemical Plant in Lekki, Lagos State, for an initial duration of 10 years.
In 2023, Shell Nigeria Gas (SNG) progressed discussions on a collaboration to develop a new gas distribution infrastructure network in Oyo State, the fourth state where SNG is active. The proposed new gas distribution infrastructure will play a pivotal role in distributing more reliable energy to industrial and commercial customers in the state. The project offers an opportunity to increase the utilisation of domestic gas in both the state and Nigeria as a whole. This collaboration is poised to contribute to growing local industries and creating employment opportunities.
For solar energy, Daystar Power grew its business with a focus on hybrid solar systems for industrial customers. The company is now looking to grow its portfolio through installations in its existing markets – mainly in Nigeria – as well as in markets such as South Africa, into which Daystar expanded last year.
Meanwhile, All On – our impact investment business – now has a total portfolio of 49 renewable energy companies, which have delivered more than 130,000 energy connections to under-served areas of Nigeria. In 2023, All On delivered professional services support to approximately 20 companies through the All On Hub. Through this support, one of the investees, Auxano Solar, successfully launched its 100 MW Solar PV assembly plant.
Transforming lives through health and education programmes
I am pleased by the work with our communities to create Host Communities Development Trusts (HCDTs), which will enable support for the communities’ development needs through a structured process. By the end of the year, an industry record 27 of the 33 HCDTs had been incorporated and funded by SPDC. During 2023, statutory contributions of $42 million were paid to HCDTs for the development of the respective communities in line with the aspirations of the Petroleum Industry Act (PIA).
Beyond these contributions, Shell Companies in Nigeria spent a further $42.2 million to fund direct social investments in the country in 2023, benefitting communities, health, education, road safety and enterprise programmes.
Our community health programmes have helped many Nigerians over the years. During 2023, SPDC supported 10 healthcare centres in the Niger Delta and – together with SNEPCo – funded the Health-in-Motion mobile healthcare programme, which has assisted more than one million people since its launch in 2010.
Since the 1950s, Shell Companies in Nigeria have also supported education through scholarships and other initiatives. In 2023, SPDC, SNEPCo and SNG invested more than $3 million in such programmes.
SPDC completed the handover of the Centre of Excellence in Geosciences and Petroleum Engineering to the University of Benin, which will help encourage development of technical capabilities for the future. Two additional educational infrastructure projects are under construction, the $10 million Geosciences Centre of Excellence for the University of Lagos and the $5 million e-library project at the Niger Delta University in Bayelsa State.
Each of these projects contributes to a legacy of social commitment that will shape the lives of future generations of young Nigerians.
Long-term strategic partnership with Nigeria
In January 2024, Shell plc announced the sale of SPDC to Renaissance, a consortium of five companies comprising four exploration and production companies based in Nigeria and an international energy group.
Completion of this transaction remains subject to regulatory approvals and other conditions precedent. The transaction is designed to preserve the full range of SPDC's operating capabilities for the benefit of the SPDC joint venture.
It is important to emphasise that Shell is not leaving Nigeria and will remain a major partner of the country's energy sector through its Deep Water and Integrated Gas businesses.
Our collective focus remains on delivery of safe operations and care for our people. I have faith in the commitment and resilience of our people in navigating the transition as we focus on opportunities for growth.
In conclusion, Shell Companies in Nigeria delivered a strong performance in 2023. We worked with stakeholders and communities to make a positive contribution to socio-economic development, and continued to power progress through more and cleaner energy solutions that meet the growing demands of our customers.
