Shell’s $10 Billion Global Tax Bill Is Least Painful at Home

(Bloomberg) -- Pumping millions of barrels a day of oil and gas left Royal Dutch Shell Plc with a hefty tax bill in 2018, but one of its home bases was a notable exception.

The London-listed energy giant paid a total of $10.1 billion in corporate income tax and $5.8 billion in royalties globally last year. The Middle Eastern nation of Oman was the biggest recipient, while the U.K. Treasury actually owed Shell money.

In the U.K., Shell’s $135 million corporate income tax bill was offset by a number of tax credits, including refunds related to the dismantling of the Brent and Miller fields. In the end, the company was actually due a refund of $114.9 million for the year.

That’s not so unusual in the North Sea, where many companies are incurring losses as they spend money to remove aging facilities from depleted fields. From 2016 to 2017, the U.K. government handed out more repayments than it received in tax and license revenue, according to the National Audit Office.

At the other end of the spectrum, the Anglo-Dutch company paid $3.26 billion in taxes in Oman on profit of $3.33 billion, according to its 2018 Tax Contribution Report. Shell pays tax in the country at a rate of 83.75% on profits derived from trading and hydrocarbon production. It also was subject to a 55% tax rate following the sale of its stake in the Mukhaizna production sharing agreement.

Nigeria received the second-largest tax payment of $1.31 billion, while the Netherlands, where Shell’s corporate headquarters is located, received $173.6 million.

This is the first time Shell published corporate income tax by country, in what Chief Financial Officer Jessica Uhl called “an important step towards greater transparency around Shell’s approach to paying taxes to governments around the world.”

To contact the reporter on this story: Laura Hurst in London at lhurst3@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Amanda Jordan

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