ROYAL Dutch Shell received around $110 million (£87m) more back from the UK Government in respect of its oil and gas exploration and production activity than it paid in taxes last year, the company has revealed.
In a report on the payments it made to governments in 2019 the oil giant disclosed that it received tax rebates in respect of its UK North Sea business totalling $116 million. These dwarfed the $6.5m that the company paid in fees.
Israeli oil firm set to make massive profits in North Sea despite crude price plunge
The report highlights the value of the tax relief provided to firms in respect of the costs of decommissioning North Sea facilities.
Shell was paid $74.3m in respect of Northern North Sea decommissioning work last year.
The vast bulk of this related to work on the giant Brent field. Last year Shell removed the second of four platforms used on the field.
It received other tax refunds worth $42m.
The UK Government enacted generous tax reforms to try to encourage firms to invest in the North Sea after activity levels slumped in response to the sharp fall in the crude price between 2014 and 2016.
Could oil giants justify paying out billions more in dividends amid challenges posed by coronavirus?
The plunge in the crude price this year is posing huge challenges for the industry.
Shell invested heavily in recent years in big field developments West of Shetland..
The scale of the repayments made to Shell may provoke concern at a time when the public finances are set to come under strain.
Warning: North Sea faces 'premature end' as firms slash costs amid mayhem in oil market
The Government has committed huge sums to helping keep businesses afloat amid the crisis caused by the coronavirus.
The chair of Shell UK, Sinead Lynch, noted recently that the company only decommissioned Brent after the field had generated around £20bn tax receipts.
The payments to governments report shows Shell paid $22.7bn in total to governments around the world in 2019.
The company paid $3.1bn to the Norwegian authorities last year
It paid most in Nigeria, where payments totalled $5.6bn, including the government’s share of production revenues.
Shell paid $1.3bn to the US authorities.
Shops across Scotland are closing. Newspaper sales are falling. But we’ve chosen to keep our coverage of the coronavirus crisis free because it’s so important for the people of Scotland to stay informed during this difficult time.
However, producing The Herald's unrivalled analysis, insight and opinion on a daily basis still costs money, and we need your support to sustain our trusted, quality journalism.
To help us get through this, we’re asking readers to take a digital subscription to The Herald. You can sign up now for just £2 for two months.
If you choose to sign up, we’ll offer a faster loading, advert-light experience – and deliver a digital version of the print product to your device every day. Click here to help The Herald: https://www.heraldscotland.com/subscribe/ Thank you, and stay safe.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here