Shell Plc said on Nov. 21 it will evaluate plans to spend up to 25 billion pounds in Britain over the next decade following the government’s decision to increase a windfall tax on oil and gas producers.
“We’re going to have to evaluate each project on a case-by-case basis,” said Shell’s U.K. country chair David Bunch told the Confederation of British Industry’s annual conference in Birmingham. “When you tax more you're going to have less disposable income in your pocket, less to invest.”
British finance minister Jeremy Hunt last week announced plans to increase a windfall tax on North Sea producers to 35% from 25% in the face of surging energy prices in order to help plug a major hole in public financing.
The government forecasts that the tax, which was also extended from the end of 2025 to 2028, will raise 40 billion pounds.
The tax, known as the Energy Profits Levy (EPL), will bring the total taxes on the sector to 75%, among the highest in the world. It nevertheless allows to deduct most investments in new oil and gas projects from the tax.
In a statement on Monday, Shell said that the EPL should be designed to provide incentives to address oil and gas supply shortages as well as longer-term investments in renewables.
To reach that objective, the EPL should include a “price backstop” in case oil and prices drop sharply and should also be expanded to include investments in wind generation, hydrogen and carbon capture technology, Shell said.
Shell said earlier this year it plans to invest 20 to 25 billion pounds over the next 10 years in Britain’s energy infrastructure including oil and gas, offshore wind, electric vehicle charging and hydrogen.
“The energy sector needs to have confidence that there will now be a stable investment climate following a period of considerable uncertainty,” Shell said.
Recommended Reading
Shale Outlook: E&Ps Making More U-Turn Laterals, Problem-Free
2025-01-09 - Of the more than 70 horseshoe wells drilled to date, half came in the first nine months of 2024 as operators found 2-mile, single-section laterals more economic than a pair of 1-mile straight holes.
Watch for Falling Gas DUCs: E&Ps Resume Completions at $4 Gas
2025-01-23 - Drilled but uncompleted (DUC) gas wells that totaled some 500 into September 2024 have declined to just under 400, according to a J.P. Morgan Securities analysis of Enverus data.
Formentera Joins EOG in Wildcatting South Texas’ Oily Pearsall Pay
2025-01-22 - Known in the past as a “heartbreak shale,” Formentera Partners is counting on bigger completions and longer laterals to crack the Pearsall code, Managing Partner Bryan Sheffield said. EOG Resources is also exploring the shale.
Hibernia IV Joins Dawson Dean Wildcatting Alongside EOG, SM, Birch
2025-01-30 - Hibernia IV is among a handful of wildcatters—including EOG Resources, SM Energy and Birch Resources—exploring the Dean sandstone near the Dawson-Martin county line, state records show.
Ring May Drill—or Sell—Barnett, Devonian Assets in Eastern Permian
2025-03-07 - Ring Energy could look to drill—or sell—Barnett and Devonian horizontal locations on the eastern side of the Permian’s Central Basin Platform. Major E&Ps are testing and tinkering on Barnett well designs nearby.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.