The Shell Petroleum Development Company of Nigeria Limited (SPDC), incorporated in 1937, is the pioneer hydrocarbon exploration and production company in the country. With the current production capacity of about one million barrels per day of crude oil and more than 700 million scf/d of gas from its oil fields, it remains the largest producer of oil and gas in Nigeria. In comparative terms, the company produces almost half of Nigeria's crude oil from more than 90 oil fields and supplies about 70percent of the country's commercial gas. The company's operations are concentrated in the Niger Delta and the adjoining shallow offshore, where she operates in an oil mining lease area of about 31,000 square kilometres. She has over 6,000 kilometres of pipelines and flowlines, 87 flowstations, eight gas plants and more than 1,000 producing wells. In 2001, the joint venture accounted for some 39 per cent of Nigeria's oil production and about 55 per cent of the country's crude oil reserve base. The company produces over 70 percent of the country's commercial gas.

OTHER AFFILIATED COMPANIES IN NIGERIA
Shell Nigeria Exploration and Production Company(SNEPCO)
SNEPCO was established in 1993, and later that year, it signed Production Sharing Contracts with the Nigerian National Petroleum Corporation (NNPC) to operate two deep water and three onshore licences. SNEPCO made two major deep water discoveries. The development of these fields allows Shell to bring its expertise in deepwater technology into play and transfer the relevant technologies and skills to Nigeria.

Shell Nigeria Gas Ltd (SNG)
This company was incorporated in March 1998 to promote gas utilisation as a cheaper, more reliable and cleaner fuel alternative and feedstock for industries. SNG is driven by the vision that natural gas will overtake liquid fuel as the fuel of first choice for Nigerian industries by 2010.

Shell Nigeria Oil Products Limited (SNOP)
SNOP was incorporated in Nigeria in 2000. The company, which aspires to become a serious competitor in the downstream sector, will develop and maintain the market for Shell branded products and services to customers in Nigeria. The company's vision is to become the largest supplier of refined petroleum products in the country.

Nigeria Liquefied Natural Gas Limited (NNLNG)
Shell has a 25.6% shareholding in NNLNG and is also the technical leader. Its partners in this company are NNPC (49%), Elf (15%) and Agip (10.4%). Trains 1 and 2 of the $3.8 billion plant began operating in late 1999, supplying liquefied natural gas to markets in Europe, and also the US. The plant is currently being expanded with a third train, which will increase its capacity by 50 per cent, and raise Nigeria's share w world NLNG market to 8 per cent. The partners have approved further expansion he plant's capacity. The largest single consumer of our gas is the Nigerian Liquefied Natural Gas Limited (NNLNG).

TURNING GAS TO VALUE
As part of SPDC's commitment to ending routine gas flaring by 2008, it has developed a comprehensive programme to ensure that gas is put to economic use for the benefit of the country. This involves finding commercial uses and outlets through the following:

West African Gas Pipeline (WAGP)
SPDC is a shareholder in the West African Gas Pipeline Project, which is intended to supply gas from Nigeria to the Republic of Benin, Togo and Ghana. It is expected that SPDC will supply some 200 million scf/d of gas to the pipeline when it is fully operational.

Electricity
Key to sustained growth in the domestic Nigerian gas market in the medium to long term is the power sector. With that in mind, SPDC submitted and won two bids for the rehabilitation of major gas fired power projects at the Afam power plants, near Port Harcourt. The contracts (to refurbish, operate and transfer the Afam I-IV plants and lease, operate and transfer the Afam V plant) will involve investments by SPDC and its joint venture partners of some USD$540 million. Under the terms of the bids, SPDC will take over the existing assets in 2002 and operate the Afam power plant for a period of 15 years. When completed, the projects will deliver some 900 mega watts of energy into the national electricity grid, which will provide a secure outlet for some 220 250 million scf/d of both Associated and non associated gas from SPDC operations. In addition, SPDC continues to supply gas to the National Electric Power Authority (NEPA) thermal stations at Ughelli, Sapele and Egbin.
SPDC currently supplies gas to:

• National Fertiliser Company of Nigeria Limited (NAFCON)
• Aluminium Smelting Company of Nigeria Limited (ALSCON)
• Delta Steel Plant in Aladia and the Ajaokuta Steel Complex in Kogi State
• Other smaller private industries are being supplied with gas from SPDC's areas of operations

Associated Gas Gathering (AGG) Projects
SPDC target of eliminating all unnecessary flaring of gas by 2008 means a considerable investment continues to be made in projects to gather Associated Gas (AG) from their flowstations. Among the completed projects are Soku, Nembe Creek, and Obigbo North.

Sustainable Development
SPDC is a firm believer in sustainable development and is actively integrating its principles into all aspects of its business. Accordingly, as much emphasis is placed on social responsibility and environmental issues as is done for economic and business concerns. As a result, a total of 21 of the company's facilities, among them flowstations, Pipelines and our two oil export terminals have so been externally certified to International Standard Organisation (ISO 14001) specification. The story of the Joint Venture is not all oil and gas production and national Economic growth; it has over the years also impacted very positively on socio-economic life in the communities. The Joint Venture is the highest private investor in social development in Nigeria, investing more than USD$50 Million annually in community development projects in the JV areas of operations.