Shell Reports Drop in Taxes Globally

Anglo-Dutch major Shell paid $7.7bn in upstream taxes globally last year and $2.7bn in royalties, down from the $14.3bn and $3.9bn respectively it paid n 2014, it said in a transparency report published April 18. Profits tax on upstream activities fell, in line with the price of crude.

Aggregating all its payments to governments, last year it paid over $60.8bn and collected a further $50.4bn in excise, it said, but it could not provide the same figures for the year before. But that first figure is the gross figure, and Shell as the operator is proportionally reimbursed by its non-operating venture partners through a partner billing process (cash-call).

Rule changes on transparency reporting mean producers do not have to go into details of payments to governments where it is an incorporated joint venture, so payments made in the Netherlands where its only upstream activities are carried out by Nam, for example, are not disclosed. It also does not show figures for countries which prohibit this information, so there is no mention of Russia, for example.

It lists projects in 24 countries, and the categories of payments including bonuses, fees and royalties. Those totalled $21.8bn, of which over half – $12.9bn – was in production. Pearl Gas-to-Liquids in Qatar, for example, cost Shell $989.7mn in government take, of which $452mn were output and $520mn went in taxes. In Nigeria it paid out $4.95bn, of which $3.6bn was production. In the UK by contrast it received a tax rebate of $128.36mn from the government to contribute towards the cost of decommissioning the Brent complex.

Next year's figures will be different as they will include assets that formerly belonged to BG. Shell paid just $878.1mn to the government of Australia, home to former BG-operated Queensland LNG plant.

William Powell