The Norwegian oil giant that plans to develop the Rosebank field West of Shetland paid $6million (£4.8m) tax in the UK last year after generating $1 billion profits in the country a report shows.
The details of Equinor’s UK tax affairs are disclosed in the latest Tax Contribution report published by the group.
This shows the company paid $49 billion to governments globally in total with $44.3bn going to the Government of Norway.
The disclosures will fuel controversy about the tax bills paid by oil and gas firms amid the surge in oil and gas prices fuelled by Russia’s war on Ukraine.
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Equinor made a record $75bn profit before tax last year globally compared with $33.5bn in the preceding year.
The tax report shows nine Equinor companies registered in the UK paid $6m tax in total in 2022. The companies generated retained earnings totalling $1.1bn.
Equinor also paid $4m fees, including $1.3m in respect of Rosebank.
The report covers a year in which the UK Government introduced a windfall tax on North Sea oil and gas companies’ profits, which critics said would scare off investors.
Equinor does not appear to have been badly affected by the tax.
The report underlines the value of the tax reforms introduced in recent years to encourage firms to invest in the UK North Sea.
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A generous new allowance was introduced alongside the windfall tax.
Asked about the report yesterday, the company’s UK spokesperson said: “Equinor has made substantial investments in large industrial projects in the UK and is still recovering the cost of these investments for UK tax purposes.”
Equinor started production from the giant Mariner field East of Shetland in 2019 with partners following $7.7bn investment.
In September, Equinor approved plan to develop the 300 million-barrel Rosebank field with Israeli-owned Ithaca Energy. Equinor said the development is expected to involve around $3.8bn investment. First production is expected by the end of 2027.
Campaigners have criticised the plan on environmental grounds.
Ithaca also plans to develop the Cambo field West of Shetland, although Shell withdrew from the project citing economic factors.
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Shell paid $17m to the UK Government in 2022 out of a global total of $34.4bn. It paid $7.7bn to the Norwegian Government.
Shell received net tax repayments in respect of its UK North Sea business for years, thanks largely to the value of the relief provided for decommissioning costs.
The Norwegian tax rate is 78%. The total rate payable in the UK is 75%, including the 35% windfall levy. Industry leaders say the Norwegian administration has been more supportive than the UK’s because it has left the regime unchanged for some time. The UK tax regime has been subject to more frequent changes.
After reviewing the North Sea fiscal regime, the Government last month left the windfall tax rate unchanged. It reaffirmed plans for the tax to remain in place until March 2028.
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