According to recent reports, energy giant Shell plc recorded its lowest payments to the Nigerian government in more than a decade following its withdrawal from the country’s onshore oil operations.
According to Shell’s latest Report on Payments to Governments, the company paid about $2 billion to Nigerian authorities in 2025. The figure marks a steep decline from the $5.34 billion paid in 2024 and significantly below the $6.39 billion recorded in 2018.
The payments covered production entitlements, taxes, royalties, and regulatory fees tied to Shell’s remaining Nigerian operations. Production entitlements accounted for the largest portion at approximately $1.24 billion, paid to the Nigerian National Petroleum Company Limited. Royalties and taxes were also paid to agencies including the Nigerian Upstream Petroleum Regulatory Commission and the Federal Inland Revenue Service.
Industry analysts say the sharp drop reflects the long-anticipated impact of Shell’s exit from Nigeria’s onshore oil sector. In 2024, the company completed the sale of its onshore subsidiary, Shell Petroleum Development Company (SPDC), to Renaissance Africa Energy Company, ending decades of direct onshore operations in the Niger Delta.
Shell’s strategy in Nigeria is now largely focused on offshore and deepwater assets, particularly the Bonga oil field, where the company continues to maintain significant interests. The move aligns with a broader trend among international oil majors shifting away from high-risk onshore assets toward offshore operations considered more commercially stable and secure.
The decline in Shell’s payments could have broader implications for government revenue generation, especially as Nigeria continues efforts to boost crude oil production and attract fresh investment into the energy sector. Analysts note that indigenous operators taking over divested assets will now play a bigger role in determining future output and fiscal contributions.