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PRESS: Shell chief to "think twice" about further UK oil investment

6th Mar 2023 06:29

(Alliance News) - Shell PLC's new Chief Executive Wael Sawan has said the US is more attractive for energy investment than the UK, in an interview with The Times on Monday.

Sawan told The Times that the UK government should look to the US' recent actions, such as the Inflation Reduction Act, which gives a USD369 billion subsidy package to encourage domestic green investment.

Sawan said he would "think twice" about further oil investment, citing "more attractive" propositions, such as the US Gulf of Mexico.

Recent developments in the UK such as ad-hoc interventions, delays to planning, and a lack of clarity over subsidies are likely to hinder Shell's goal to invest GBP25 billion in the UK over the next decade, he said.

Sawan also cited the energy profits levy, which raised the tax rate in the North Sea to 75% from 40%.

The levy is "fundamentally disincentivising the investment in new supplies which are critical if you want to build energy security for the long term”, Sawan told The Times.

Shell expects to pay around USD500 million in tax in Britain in 2023 due to the levy.

A lack of incentives and permissions are also hindering three-quarters of its potential UK investments, which are low carbon, Sawan said.

In early February, Shell said it made a yearly pretax profit of USD64.81 billion in 2022, more than doubling from USD29.83 billion. Revenue soared 42% to USD386.20 billion from USD272.66 billion.

Former Shell CEO Ben van Beurden back in October had said the governments should "probably" tax energy firms, as many consumers struggle with a rising cost of living. van Beurden left at the end of 2022.

Shares in Shell closed down 0.8% at 2,582.50 pence each in London on Friday.

By Elizabeth Winter, Alliance News senior markets reporter

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