UK tax rise blamed for Shell Oil cutbacks
Energy giant Shell announced today that it has slashed a multi-million pound oilfield investment programme by a third, blaming the move on tax hikes by British Chancellor of the Exchequer Gordon Brown.
The company said it had been planning to hire three drilling rigs for exploration but had decided to cut that to two.
The move follows the doubling by the Chancellor in his pre-budget report this month of corporation tax on North Sea producers from 10% to 20%.
A Shell UK spokeswoman said: “We had tendered for three rigs but after an investment review following the announcement of an increase in supplementary corporation tax we have unfortunately only been able to commit to two rigs at this time.
“We are disappointed by the government’s recent decision and we are continuing to evaluate the impact that the proposals might have on our business.”
Shell has interests in about 50 oil and gas platforms in the North Sea, and owns 21 outright.
The three extra rigs were to be hired to cover new exploration projects over the next few years at a cost up to £140,000 (€206,000) a day but the plan has now been cut back.
Labour’s political opponents seized on the announcement and claimed jobs in the industry, which employs more than 260,000 people, were under threat because of tax raids by Mr Brown.
Conservative Shadow Scottish Secretary David Mundell said: “On the day of Gordon Brown’s pre-budget statement, he was warned of the possible dire consequences of his raid on the oil companies.
“This news confirms our worst fears – Gordon Brown’s massive tax hike is going to prove bad for Britain and bad for Scotland.”
Scottish National Party leader Alex Salmond accused the Chancellor of sacrificing Scottish jobs to safeguard his own career ambitions.
