Shell Publishes 2016 State Payments
Shell has published its payments made to governments in 2016 where it is upstream operator.
Its June 13 report details payments in 31 countries and is the second such prepared in compliance with UK and EU regulations. There is no breakdown between oil and gas-related upstream payments. Payments made by entities over which Shell has joint control are excluded from this report, which explains why the Netherlands -- where Shell-Exxon joint venture NAM is a significant gas producer -- is not included.
Just over $15bn was paid by Shell directly to 31 governments last year, of which production entitlement payments were $9.15bn, taxes $3.55bn, royalties just over $2bn and fees nearly $0.3bn.
The largest net amounts paid to governments by Shell were some $3.64bn to Nigeria, $2.67bn to Malaysia, $2.53bn to Norway, $1.61bn to Iraq, $1.08bn to Oman, $0.56bn to Brazil, $0.43bn to Philippines, but minus $134.3mn to the UK.
The latter was due to a $142.5mn tax credit in the UK mainly for decommissioning costs in the North Sea; Shell recently dismantled the Brent Delta oil and gas platform there and is about to do the same to Brent Bravo. The only similar-sized tax credit received by Shell elsewhere was $254mn in the US but, because of royalties of $375mn, Shell still paid US authorities a net $179mn.
Two signature bonuses paid by Shell directly: almost $5.5mn to Bulgaria’s energy ministry for the 6,893 km2, 1-14 Silistar offshore exploration block in the Black Sea that was formally transferred to Shell in April 2017; and $5mn to Argentina for an annual area license fee there covering unconventional resources in the onshore Neuquen basin. In both regions, gas is seen as the main exploration target.
Bulgaria's Temenuzhka Petkova and Shell's Eileen Wilkinson sign the 2016 Silistar exploration agreement. This year the block was renamed Han Kubrat after a 7th century Bulgarian ruler. It is located near the Romanian deepwater block Neptun where OMV-Petrom and Exxon jointly expect to produce gas in the 2020s (Photo credit: Bulgarian government)