Shell to evaluate UK investments as windfall tax on oil producers increased
MADRID (ICIS)–Shell is to evaluate plans to spend up to £25bn in the next 10 years in the UK after the government announced an increase in a windfall tax on oil and gas producers, the energy and petrochemicals major confirmed to ICIS.
The head of Shell UK operations, David Bunch, said on Monday the company is to “evaluate on a case by case basis” its investments in the UK, according to news agency Reuters.
A spokesperson for Shell, however, would not clarify whether the re-evaluation of capital expenditure (capex) plans in the UK could affect the company’s petrochemicals operations.
Earlier in November, the UK’s Chancellor of the Exchequer, Jeremy Hunt, announced the Energy Profits Levy (EPL) on oil and gas companies will increase from 25% to 35% from 1 January 2023 until the end of March 2028, among other measures to increase its tax collection.
“When you tax more, you’re going to have less disposable income in your pocket, less to invest,” said Shell’s Bunch to the Confederation of British Industry (CBI)’s annual conference on Monday.
“The comments by David Bunch … relate to future projects and it’s too early to say which could potentially be affected,” the spokesperson said.
Shell’s chemicals operations in the UK include its ethylene-producing facilities at Mossmorran, Scotland, which is owned and operated by ExxonMobil Chemical, from which Shell takes 50% of the capacity.
Part of the ethylene is used at the Stanlow facilities in the north of England, to produce polymer, lubricant, and detergent intermediates, plasticizers, and detergent alcohols.
For alcohols, Shell’s Stanlow facilities have a production capacity of 40,000 tonnes/year for linear alcohol and 37,000 tonnes/year for oxo-alcohols, according to the ICIS Supply and Demand database.
The Stanlow plants are operated by Essar Oil on Shell’s behalf as part of an integrated oil refinery and petrochemicals site.
Additional reporting by Yashas Mudumbai
Speak with ICIS
Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.
Want to learn about how we can work together to bring you actionable insight and support your business decisions?