- The Oil and gas major Shell said it expects to take a $2 billion hit for the fourth quarter as a result of new taxes in the European Union and the U.K.
- Shell said it expects its liquefied natural gas (LNG) volumes to have dropped to between 6.6 million-7 million metric tons in the fourth quarter, owing to longer-than-expected outages at two Australian facilities.
On Friday, The Oil and gas major Shell said it expects to take a $2 billion hit for the fourth quarter as a result of new taxes in the European Union and the U.K. In an official statement, the company said, “The Q4′22 earnings impact of recently announced additional taxes in the EU (the solidarity contribution) and the deferred tax impact from the increased UK Energy Profits Levy are expected to be around $2 billion”. This sum represents the additional tax liability incurred by the company as a result of the levies.
The EU agreed in September that oil and gas companies will pay a levy on surplus profits made in 2022 or 2023. The “solidarity contribution” will see firms pay 33% of profits above their average taxable profits. Meanwhile, U.K. Finance Minister Jeremy Hunt said in his November Autumn Statement that the energy industry will be subject to an expanded windfall tax of 35%. The levy, which ends on 31 March 2028, is expected to raise in excess of $40 billion over the next six years. In November, Shell’s U.K. Country Chair David Bunch signalled that the company would evaluate each of its projects in the country on a case-by-case basis, following the windfall tax announcement.
Shell’s adjusted earnings more than doubled on the year to $9.45 billion in the third quarter, after logging a record profit of $11.5 billion in the three-month April-June period. In October, it revealed plans to raise its dividend per share by roughly 15% for the fourth quarter. In its Friday trading statement, Shell said it expects its liquefied natural gas (LNG) volumes to have dropped to between 6.6 million-7 million metric tons in the fourth quarter, owing to longer-than-expected outages at two Australian facilities. Despite this, the energy major said it anticipates its LNG trading results to be “significantly higher” than in the third quarter.