Shell to pay £1.7bn in UK and EU windfall taxes for past quarter

Shell said it will pay around $2bn (£1.7bn) in UK and EU windfall taxes in the latest quarter.

This comes after an executive at the London-listed oil giant said it had not paid the UK windfall tax in October for its large investments in the North Sea.

The company told investors on Friday that it will face a hit to earnings in the final quarter of 2022 from an increase in the UK’s energy profits tax and additional EU taxes.

In May, the government announced a windfall tax on profits of oil and gas companies, and in November the new prime minister announced that it would be increased to 35% from an initial 25%.

In the third quarter, Shell benefited from an 80% investment allowance related to the UK windfall tax. This allowance was also significantly reduced as part of the fall budget.

Last quarter, adjusted profit more than doubled year-on-year to $9.5 billion (£8.2 billion) in the three months to end September.

Nonetheless, this represents a decline from the previous quarter.

In total, Shell said it expects to pay $4.3 billion to $4.7 billion in global taxes in the fourth quarter.

On Friday, the oil giant also revealed that transactions in its chemical business are expected to be “significantly lower” in the final quarter of 2022 compared to the previous quarter.

It added that liquefied natural gas (LNG) production in the quarter was affected by major shutdowns at two plants in Australia.

The group is expected to release full results for fiscal 2022 on February 2nd.

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