Sunday, October 31, 2021

North Sea Oil Tax-free

 While the G-20 at its Rome conference agreed to a minimum tax rate for the global corporations of 15%, something they all still have to get passed through their individual parliaments, (and in the case of Biden, with his present budget impasse, that is unlikely),  Shell and BP, have not paid any corporation tax on oil and gas production in the North Sea for the last three years by benefiting from billions of pounds of tax breaks and reliefs for oil and gas production.

Shell and BP paid no corporation tax or production levies on North Sea oil operations between 2018 and 2020, and claimed tax rebates of nearly £400m.  Over the same three-year period, they paid shareholders more than £44bn in dividends.

Shell and BP, which together produce more than 1.7bn tonnes of greenhouse gases a year and have an annual global footprint of greenhouse gases more than five times bigger than Britain’s.

The North Sea is now one of the most profitable areas in the world for oil and gas production, after tax cuts by the government to encourage production. A petroleum revenue tax of 35% was effectively scrapped by the then chancellor, George Osborne, in 2016 and oil giants can claim billions of pounds in taxpayer handouts for decommissioning rigs. There are about 180 oil rigs in the North Sea. The UK Treasury will foot a bill of more than £18bn for the decommissioning of the oil and gas infrastructure in the North Sea up to 2065 – made up of tax repayments and a reduction in offshore corporation tax.

Philip Evans, oil and gas campaigner for Greenpeace UK, said: “It’s outrageous that as the UK prepares to host global climate talks in Glasgow, we still have one of the lowest effective tax rates in the world for oil extraction. We’re giving tax breaks worth billions of pounds to companies that have been fuelling the climate emergency for decades.”

The UK has some of the lowest oil tax rates in the world. An analysis found the UK is now the most profitable country in the world for the development of oil and gas “mega-projects”. A report published last week by Friends of the Earth and the New Economics Foundation found that the oil and gas industry is preparing to seek approval for 30 offshore projects by 2025.

Gabrielle Jeliazkov, a campaigner at Platform, a UK group that investigates the social and environmental effects of the global oil industry and is supporting the legal case, said: “The government has spent too long backing oil giants through tax breaks and subsidies. It has had devastating consequences for the climate.”

Shell and BP paid zero tax on North Sea gas and oil for three years | Oil and gas companies | The Guardian

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