ROYAL Dutch Shell has revealed that it was refunded $142.5 million tax in the UK last year, in a development that highlights the scale of the bills the government will face as North Sea fields run dry.

Around $116m of the refund appears to be due to the relief provided to Shell for the costs of decommissioning work completed on the giant Brent field north east of Shetland.

The first of four platforms used on the field was shipped to Hartlepool on a giant vessel earlier this month in a move that marked the end of an era. Brent became one of the first North Sea fields to go into production in 1976.

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Hundreds of other oil and gas installations will enter the decommissioning process in the UK in coming decades.

The $142.5m repayment is stated net of the tax paid by Shell to the UK Government in respect of the profits made on North Sea output.

In November Shell said it had achieved a big improvement in its performance in the North Sea last year.

The company axed 1,000 jobs in Aberdeen under plans to increase efficiency in response to the crude price plunge.

Led by chief executive Ben van Beurden, it paid $8.2m fees last year to the Department of Energy and Climate Change, meaning it was refunded $134.3m net by the government.

Noting that Shell invested billions of pounds in Brent, a Shell spokesperson said work on the field had created tens of thousands of jobs and brought huge benefits to the supply chain.

The spokesperson added: “On overall profits from the Brent field, the government has taken 70 per cent as direct tax. This amounts to more than £20bn of tax revenue (in today’s money). The government has agreed a legally binding framework with the oil and gas industry to ensure long term certainty on the tax relief regime. The agreement helps to safeguard continuous investment in the North Sea by ensuring that operators can plan for and quantify future decommissioning costs.”

Shell continues to invest heavily in the UK North Sea through projects such as Claire and Schiehallion West of Shetland.

The net refund is disclosed in a report on payments made to governments by Shell in 2016, which was published yesterday.

The company paid $15bn in total to 31 states.

The biggest beneficiary was Nigeria, which was paid $3.7bn.

Germany was the only other country to make a net repayment to Shell, of $1m.