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Oil giant, Royal Dutch Shell has disclosed that Nigeria’s claims that it was owed billions in taxes could delay the development of Bonga South West. The major oil field project across West African coast is believed to be a big one for the multinational and the country.

The government of Nigeria told Shell and other International Oil Companies (IOCs) to pay nearly $20 billion in taxes which the government claimed it owed states and industries.

Shell, the largest investor in Nigeria would likely dispute and challenge the charges legally depending on management decisions.

The company’s Head of Upstream, Andy Brown made this known on the sidelines of the International Petroleum Week conference.

According to the Shell helmsman, “It is something that has gone through the courts in Nigeria which relates to an original clause within the original PSCs (production sharing contracts). We will have to take it seriously but we think it has no merits.”

The outstanding tax issue will impede the Final Investment Decision (FID) on developing Shell’s Bonga Southwest deepwater oil field, one of Nigeria’s largest project with production expected to reach 180,000 barrels per day if completed.

Brown submitted that the IOC will need to resolve the issue with Nigerian government before heading for the FID on Bonga Southwest project. Shell has made progress with the government on some basic terms for operating the field but a decision on its development is unlikely to be made in 2019.

However, a top official of Shell in Nigeria at a Petroleum Summit organized by Nigeria’s Petroleum Ministry, said, if the Bonga Southwest project is completed, it will be a major milestone for the IOC in the country, as no other project might be able to compete with it.

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