Published Date: 29 April 2011
By Martin Flanagan
City editor
ROYAL Dutch Shell warned yesterday that it may have to sell some assets in the North Sea and reduce investment in the region because of the Chancellor’s tax raid and higher industry decommissioning costs in the Budget.
Simon Henry, chief financial officer, revealed that the changes could cost the group $1 billion (£600m) in extra charges, a similar sum to that facing rival BP.
He said that Shell had taken a $60 million hit in the first quarter of this year on the extra tax levy on North Sea production and would face a further $150m impact over the rest of 2011. There will be another $400m charge in 2012.
In addition, reduced tax breaks for decommissioning rigs was likely to lead to another charge of up to $500m.
“It’s a fact of the business we are in. Not just governments but suppliers look for a share of higher revenues,” Henry said.
He added that big Shell interests in the North Sea, such as the Clair and Schiehallion fields to the west of Shetland that are operated by BP, were unlikely to be affected by the tax raid. read more
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