From Global Witness yesterday:
In March, Shell released its annual country payments, showing that the UK received £15 million in taxes and fees from the company in 2022. This placed the UK 20th out of the 25 countries Shell paid tax to.
That’s 22p per citizen, and 430 times less than Shell paid Norway (£6.3 billion). This despite the fact that Shell doesn’t report any oil production at all in Norway, and only produces 2.5 times more gas in Norway than it does in the UK.
The UK’s windfall tax clearly isn’t working, and is undermined by a series of loopholes that means the oil and gas industry is being heavily subsidised by taxpayers’ money at a time that it’s making record-breaking profits.
Shell is also receiving a £200 million tax break for pushing ahead with its Jackdaw gas field, to cite just one example.
In September 2021, TuS had this:
In the New Statesman yesterday, we read without their expected incredulity:
North Sea oil companies receive more money from the government than they pay in taxes
The UK has given firms including Exxon and Shell hundreds of millions of pounds in rebates.https://www.newstatesman.com/energy-climate-tech/2021/09/north-sea-oil-companies-receive-more-money-from-the-government-than-they-pay-in-taxes
Why should we not be surprised to hear this?
Well back in 2019, we could read this:
And even further back, we could see this:
Only the UK does not apparently make a profit from oil extraction.
Over the longer period the UK has stopped making a profit quite recently:
So, oil stops becoming profitable after 2015? What happened just before that that may have caused the UK Government to think oil profitability was a bad idea?
The price of oil is currently soaring.
And in 2019, this:
In Scottish source Energy Voice today:
Nigeria is seeking to recover as much as $62billion (£50.6bn) from international oil companies, using a 2018 Supreme Court ruling the state says enables it to increase its share of income from production-sharing contracts. In the latest plan, the government says energy companies failed to comply with a 1993 contract-law requirement that the state receive a greater share of revenue when the oil price exceeds $20 per barrel, according to a document prepared by the attorney-general’s office and the Justice Ministry. The document, seen by Bloomberg, was verified by the ministry. When the law came into effect 26 years ago, crude was selling for $9.50 per barrel. The oil companies currently take 80% of the profit from these deep-offshore fields, while the government receives 20%, according to the document. Oil traded at $58.29 a barrel on the London-based ICE Futures Europe Exchange.
Despite their Scottish location, Energy Voice didn’t seem to consider whether there was any scope in Scotland or the UK seeking to recover billions. Sharp-eyed reads might have noticed in the above graph that Nigeria seemed to do quite well from one contractor in 2015, Shell, and that the UK did not. In fact:
‘The UK government paid Shell $123m in 2015, new figures reveal. Of 24 countries where Shell reported, the UK was the only net contributor to the oil and gas major.’
No doubt Shell’s accountants and their Eton-educated buddies in HMRC or the Treasury will have a ‘good’ explanation. When you look at Shell’s payments, in the years after the referendum as SNP support soared, another explanation comes to mind:
UK government revenues from oil and gas production
Here’s what taxjustice.net had to say:
WESTMINSTER’S “mismanagement” of oil since the price slump two years ago has cost Scotland tens of billions of pounds and is being falsely used to attack independence, a leading think tank has claimed ahead of the publication of the nation’s annual balance sheet.
In the August 2016 report, from taxjustice.net:
‘New analysis of the UK’s North Sea oil and gas suggests that the combination of tax giveaways by the government, and aggressive avoidance by multinationals, means that the country may actually be subsidising the extraction of its natural resources. A new report published today by the International Transport Workers’ Federation (ITF) sets out a series of shocking statistics on the UK’s failure to obtain an appropriate share of its own resource wealth. Among them, these stand out:
- In 2014, UK consumers paid 6 times more tax on petrol, excluding VAT, than the North Sea oil and gas industry paid on all taxes related to production.
- Chevron’s effective tax rate in 2014 on earnings from North Sea production was 5.4%; statutory tax rates (of various types) on oil and gas should have totalled 61-82%.
- In 2014, 3 (Shell, BP & Total) of the top 4 North Sea producers produced more than £4.3 billion worth of oil and gas and received over £300 million in net tax refunds.
The ITF argue that while the oil sector has successfully lobbied for and won huge tax breaks from the UK government, the companies involved continued to pursue aggressive tax avoidance as standard practice. The Chevron report (see graphic for UK structure, click to enlarge) provides a detailed case study of tax dodging tactics which are replicated by others, particularly Nexen – on which the Times had a frontpage splash yesterday, using ITF analysis to show that the Chinese government-backed company received tax credits of £2 billion.’
The Herald did, alone I think, pick up on the story:
Because the Treasury doesn’t want Scots getting ideas about going it alone?
Because Shell directors went to school and Uni with Tory minister?
Because of some other deal that’s secret?
4 thoughts on “Why does Shell pay the UK 430 times less tax than it does to Norway?”
Because Shell and other very large global countries control Westminster?
LikeLiked by 1 person
I understand Kazakhstan is also trying to claw back billions in tax from global Oil and Gas companies in Production Sharing projects .
AND THIS IS THE PU5IN TARTAN
SCOTS REDS AN BLUES +yellow skinned LIEDEMS
Lying their nests with RUSSIAN MONEY
She’ll profits worldwide. Sold off North Sea facilities. Companies tax evade. Worldwide problem. Move around assets. Offshore them etc. UK Treasury not enforcing UK tax Laws. Tax evasion costs Scotland £3Billion+. Shell only paying tax on activities in the UK?
UK tax regime on Oil & Gas should be higher depending on Oil price rises. Tax should be higher when barrel,price is high. Lower when barrel price falls. UK Gov mismanagement. Taxed at 20% corporation tax + 10% complementary. Should be higher. when barrel price is higher. Does UK Gov still get half of production. She’ll have moved out of Aberdeen. Wind, renewables now produce more revenues £3Billion+. Oil & Gas are slowing down. Replaced by renewables. Huge offshore schemes off the coast.
Decommissioning is tax free but brings in revenues. Jobs and salaries. She’ll paid £millions in Dundee. Decommissioning Dundee Harbour. Some of the workers were gangs from other parts of the UK/Ireland. Rest of the rig were towed to Turkey break up yards. Cheaper. New massive tank vessels now extract the Oil and store it before being discharged to ports. Worldwide. That happened in the 1970s before the rigs were established. Oil tankers were used to extract the Oil. and deposited at Ports. Gas was burnt off. A total waste. Petrol prices are mainly Gov tax. US fracked Gas is imported through Grangemouth. UK Gov policy. Not Devolved. Councils can have planning control on local facilities. Orkney had an Oil fund. Thatcher took the rest and lied about it. Kept it secret under the Official Secrets Act. No separate accounts. Until 2000 Devolution. Still kept secret. Accounts are deliberate guess work. To hide Westminster failings. Claim it is not possible to have separate accounts. Misguided. A click on a computer.