Shell more likely to invest in US than UK, says CEO
Shell’s new chief executive says it is more inclined to invest in the US rather than the North Sea because of a more benign environment.
Wael Sawan said $369 bilion of subsidies provided by the US government through the Inflation Reduction Act contrast with windfall taxes, planning delays and other interventions in Britain.
These were making it harder for Shell to achieve its goal of investing up to £25 billion in the UK this decade, he tells The Times.
Shell wants to build a carbon capture and storage project in Scotland but has not been selected to receive subsidies. It also wants to develop the world’s first commercial-scale floating wind farm off Scotland.
In terms of attractiveness for energy investments, Mr Sawan said the US was “ahead significantly” and that Europe was also ahead of Britain.
He said that he would “think twice about investing in more oil in the UK” as there were “more attractive locations right now”, such as the US Gulf of Mexico.
The energy profits levy, which has increased the tax rate in the North Sea from 40 to 75%, was “fundamentally disincentivising the investment in new supplies.”
Shell expects to pay more than $500 million of tax in the UK this year as a result of the levy.
“When you have such volatility [of tax changes], it fundamentally saps your conviction around your ability to be able to see the returns that are required on that investment, and therefore you move your capital to the areas where you see healthy returns at lower risk,” he said.
The Scottish Government has called for a presumption against approving new oil and gas fields in the North Sea.