Shell CEO says industry should prepare for higher taxes

The oil and gas industry should accept and be prepared for higher taxes as governments seek ways to alleviate the pressure of the energy crisis on their citizens, outgoing Shell chief executive Ben van Beurden said on Thursday.

"It's a societal reality" that governments must intervene to help their most vulnerable people, Van Beurden told reporters on Shell's third-quarter results call. "And, therefore, I think we should be prepared and accept that our industry will be looked at for raising taxes in order to fund… those who need it the most in these very difficult times… We should not be surprised," he said.

Although taxation "is the prerogative of governments", oil and gas companies should be helping to design the right policies, van Beurden said. "There are many different ways in how you can design windfall taxes, special levies, solidarity contributions etc. And I think we should be at the table to make sure that these designs are correct and appropriate for us," he said. "Of course, there is a special levy in the UK already. There is talk about special levies in, for us, important countries like the Netherlands and Germany. It's not yet settled on how that will play out. But we are ready and we are actually engaging with governments to see how that will play out. And I expect [these] to be in place… in the course of next year."

A windfall tax on oil and gas companies operating in the UK was introduced in May by prime minister Rishi Sunak in his former role as finance minister. Analysts crunched the numbers at the time and found that smaller operators with large exposure to the UK North Sea would take a substantial hit to their profits, while big producers with global portfolios would see their earnings barely affected. Ratings agency Fitch estimated that BP, for example, would see a hit of less than 2pc to its operating profit as a result of the levy.

By Jon Mainwaring