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Oil giant's UK tax bill drops after output fall

ROYAL Dutch Shell has said its tax payments in the UK fell steeply last year because of declining output in the North Sea and rising spending on mature field decommissioning.

The figures, published in the oil giant's annual revenue transparency report, will help inform an intense debate over whether Scotland would see a rise or fall in jobs and investment should it vote for independence later this year.

Shell said its income tax payments fell to $93 million (£55m) in 2013 from $815m (£485m).

"This is significantly lower than the amounts we have paid in recent years as a result of lower North Sea oil and gas production, and difficult conditions in the UK downstream sector," a Shell spokeswoman said.

"We are making significant investments in new and existing North Sea oil and gas projects, and are incurring costs to decommission ageing production facilities. UK tax law enables us to deduct this expenditure for tax purposes," she added.

The total of $15.28 billion (£9bn) that Shell paid in taxes in the UK last year represents over 14% of its global tax payments and comes only second to Germany. However, UK income tax payments lagged most countries where the company is active.

"This [UK] situation is by no means unique amongst operators in the UK North Sea - but what is unique is that we choose voluntarily to disclose how much tax we pay in key countries, including the UK," Shell said.

"We expect our recent investments of some $2bn (£1bn) a year to ensure we continue to produce safely from existing assets while investing in new production," the spokeswoman added.

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