Shell calls for 'certainty' from Government as oil and gas firms face greater windfall tax

Shell’s Sinead Gorman said on Thursday: “Elected officials just have to balance budgets in the best way they see fit.

“We have to look for policies that provide certainty… We invest over the long term.

She added: “We have seen a number of changes in the fiscal policy… in the last few years, but we continue to engage constructively with the Government on alternative fiscal regimes to support the future of the North Sea and that energy transition in the UK.”

The windfall tax applies to profits made from extracting UK oil and gas, and was initially set at 25 per cent before Conservative chancellor Jeremy Hunt increased it to 35 per cent in 2023.

Now Labour has raised it again, with plans to use the revenue to help pay for new renewable energy projects.

Ms Reeves also scrapped a 29 per cent investment allowance, which means companies can offset tax from money that is reinvested.

Ms Gorman was commenting as Shell’s profits came in higher than market forecasts last quarter, after it made more money from its gas business than people had expected.

The energy giant said adjusted earnings were $6.03bn (£4.64bn), comfortably beating analysts’ consensus of “5.36bn (£4.13bn).

Gas production was up 4.5 per cent on the same period last year, while liquefaction volumes – turning natural gas into liquid – were up 9 per cent.

Total earnings still nudged down 3.1 per cent versus last year, amid what Ms Gorman called a “less favourable” macroeconomic environment more broadly.

Brent crude prices remain significantly down over the last six months, and weaker demand for oil worldwide has hit margins at Shell’s refineries.

Refining is “a bit more difficult at the moment. We’re definitely seeing a period of rebalancing in all the energy markets,” she said.

However, Shell said it would give more returns to investors by buying back a further 3.5 billion dollars (£2.69 billion) of its shares.

It marks the twelfth consecutive quarter that Shell has rewarded shareholders with more than three billion dollars (£2.31 billion) in buybacks.

Integrated gas has been a growing focus for chief executive Wael Sawan, who has carried out a cost-cutting programme at the company and reduced its focus on renewables since joining in 2023.

On Thursday, protestors from climate group Fossil Free London gathered – dressed in Halloween costumes – outside Shell’s London office near Waterloo.

Shell has weakened several carbon reduction targets earlier this year, following other oil and gas giants in placing higher emphasis on financial returns amid pressure from investors.