Shell’s New North Sea Strategy: Drill, Merge, Dodge, Repeat

Shell — the world’s favourite greenwashing juggernaut — is once again proving that its true superpower isn’t drilling oil. It’s drilling holes in the tax system. It’s merger mania, and while executives claim it’s about “scale” and “flexibility in a declining basin,” every tax lawyer and banker worth their bonus knows the real prize: huge future profits with minimal tax bills.

Posted By John Donovan: 15 April 2025

In a move that would make even the most shameless tax accountant blush, Shell and its oily comrades have been busy merging their way out of billions in tax liabilities across the North Sea — all while crying about how unfair their taxes are.

Because when you’re one of the most profitable polluters on Earth, nothing screams “innovation” like ducking your fiscal responsibilities through creative accounting.

💸 Mergers That Smell Like Money (Saved)

Here’s the scheme — sorry, “strategy” — in action:

• Equinor, carrying a delightful $7.6 billion in North Sea tax losses, is merging its UK portfolio with Shell UK.

• Ithaca, with $4.5 billion in tax losses, merged with Italy’s Eni.

• Neo Energy, sitting on $3.7 billion in losses, is tying up with Repsol’s North Sea business.

It’s merger mania, and while executives claim it’s about “scale” and “flexibility in a declining basin,” every tax lawyer and banker worth their bonus knows the real prize: huge future profits with minimal tax bills.

“You can offset Group A’s losses against Group B’s profits,”

explained a senior tax adviser from a Big Four firm.

“There are tried and tested mechanisms, and most people understand how the rules work.”

Yes, they sure do. And Shell’s accountants could write the manual.

🧾 78% Tax Rate? LOL, Not If You Merge Right

North Sea operators are subject to a whopping 78% tax rate on profits — made up of corporation tax, a supplementary charge, and the Energy Profits Levy, aka the windfall tax introduced when energy companies started making obscene profits off the back of Russia’s war in Ukraine.

But while Shell and its friends cry foul, they’re still making it work — not by paying taxes like the rest of us, but by shuffling assets around like Monopoly cards.

“I have clients who feel more secure in the tax regime of sub-Saharan Africa than they do in the UK,”

said Nick Davis, energy partner at Haynes Boone.

“Which is frankly astonishing.”

Astonishing? Maybe. But if you’re Shell, abusing loopholes is just part of the business model.

📉 Meanwhile, UK Taxpayers Watch Revenue Drain Away

Let’s check the scoreboard:

• In 2023/24, North Sea tax receipts totalled £5 billion.

• For 2024/25, the UK’s Office for Budget Responsibility expects a 22% drop.

• By 2029/30, revenues are projected to plummet to just £2.3 billion.

All while Shell, Equinor, and friends are high-fiving in offshore boardrooms, gleefully dodging liabilities through so-called “strategic synergies.”

🔮 Expect More Mergers, Fewer Tax Bills

According to Gail Anderson of Wood Mackenzie:

“There are still big risks in the industry and companies are trying to think about how they mitigate those risks…

I think it’s probably more likely than not that we will see more deals before the year is out.”

Translation: The tax dodge train has left the station, and Shell’s driving.

💰 Enter BlackRock, Vanguard, and the Other Silent Partners

Where are Shell’s biggest investors while all this is going down? Oh, you know:

• BlackRock is too busy writing ESG reports no one reads.

• Vanguard is watching the dividend roll in.

• And State Street is probably drafting a LinkedIn post about “corporate responsibility.”

Because in fossil finance, talking green while cashing in on sin stocks is just good business.

🧠 Sober Reflection

For over 20 years, John Donovan has been publishing what Shell doesn’t want you to read on RoyalDutchShellPlc.com. The lawsuits? None. The threats? Plenty. The truth? Archived.

Ask yourself:

If this wasn’t true, wouldn’t Shell’s lawyers — all 1,000 of them — have shut him down by now?

They haven’t. Because you can’t sue reality.

🧨 Bottom Line?

Shell’s latest “strategy” is a North Sea masterclass in fiscal shapeshifting: merge with tax-losing partners, dodge liabilities, cut deals, and watch the UK’s tax revenues disappear like CO₂ into the atmosphere.

And through it all, Shell still wants you to believe they’re part of the energy transition.

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