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Oil Tanks On Worst Day In Six Months

Oil Tanks On Worst Day In Six Months

Oil prices plummeted on Thursday,…

Tax Claim Could Delay Shell’s Major Nigerian Offshore Oil Project

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Nigeria seeking nearly US$20 billion from international oil majors in back taxes could delay the approval of a major offshore oil project, Shell’s Upstream Director Andy Brown told Reuters on Tuesday.  

Nigeria has asked the oil majors operating in the country to pay a total of almost US$20 billion in outstanding taxes and royalties that it says is owed to various Nigerian states, Reuters reported last week, citing government and industry sources.  

Shell, Chevron, ExxonMobil, Total, Eni, and Equinor have each been asked to pay the federal Nigerian government between US$2.5 billion and US$5 billion, according to Reuters’ sources who saw letters sent to the oil majors earlier this year via a government debt-collection division.

Shell, a major investor in Nigeria’s oil industry, will have to take the tax claim seriously, “but we think it has no merits,” Brown told Reuters on the sidelines of the International Petroleum Week conference in London on Tuesday.  

The oil major, however, will have to resolve that tax claim issue with Nigeria before considering the final investment decision (FID) on the Bonga South West oil project, the manager said, noting that the FID “may slip into next year.”

Earlier this month, Shell’s Nigerian unit, Shell Nigeria Exploration and Production Company (SNEPCo), announced the Invitation to Tender (ITT) to contractors for the development of the Bonga South West Aparo (BSWA) oil field. The tender is for engineering, procurement, and construction contracts for the 150,000-bpd project in the Gulf of Guinea.

Related: Saudi Arabia Aims To Become Large Natural Gas Exporter

“This is a new vista for deep offshore oil and gas exploration in Nigeria based on a revised commercial framework embraced by government and the project investors,” SNEPCo’s Managing Director, Bayo Ojulari, said on February 14.

“We now have a clear commercial framework, supported by the government and project investors, toward a potential Bonga South West Aparo Final Investment Decision (FID),” Ojulari said.

While a new offshore Nigerian project could be delayed, Shell is looking to fast-track the development of the Whale discovery in the U.S. Gulf of Mexico, Brown told Reuters today.

By Tsvetana Paraskova for Oilprice.com

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