SHELL is slashing investment in the North Sea over a Budget Day tax hike – despite making £1.9million an hour.
The giant yesterday revealed the rise meant it was now “uneconomic” to develop smaller UK oil and gas fields.
Shell’s quarterly profits were up forty per cent and totalled £4.1billion.
Chief finance officer Simon Henry said the group would only invest in two new projects. Other work has gone. He said: “The irony is we were just beginning to look at what opportunities there were in the North Sea again. We hadn’t worked up the projects yet and that work now stops.”
The move threatens hundreds of jobs in the North Sea – and is the latest backlash to the Chancellor’s Budget Day clampdown.
George Osborne raised the tax on North Sea production from 50 to 62 per cent last month to pay for lower fuel duty for Britain’s motorists.
He said it would help fund the penny cut on Budget Day and the scrapping of a fuel tax “escalator”.
The Government is also threatening to cut tax relief on the decommissioning work needed to take rigs apart when oil fields reach the end of their life.
Shell yesterday booked a £660million charge to cover the higher UK tax hit.
But Mr Henry said it would not pass higher costs on at the pump, insisting there was no “linkage”.
The firm put its bumper first quarter results down to the high oil prices and fatter margins in Shell’s refining empire.
Mr Henry insisted it only made a penny from every litre of petrol it sells. And he hinted that pump prices could start to fall, adding: “The oil price is perhaps a little bit higher than the supply-demand position suggests it should be.”
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