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Shell To Pay $2B As Part Of Windfall Tax In European Union In Q4

Benzinga · 01/06/2023 08:02
  • Shell plc (NYSE:SHEL) announced the Q4’22 earnings impact of recently announced additional taxes in the EU, and the deferred tax impact from the increased UK Energy Profits Levy is expected to be around $2 billion. 
  • These impacts will be reported as identified items and, therefore, will not impact Q4’22 adjusted earnings and will have limited cash impact in Q4’22, given the expected timing of payments.
  • Shell Q4 FY adjusted loss of $(550)-$(750) million.
  • Related: Exxon Mobil Sues European Union In Efforts To Scrap New Windfall Tax On Oil Firms.
  • In its trading statement, Shell expects its liquefied natural gas (LNG) volumes to drop to 6.6 million-7 million metric tons in the fourth quarter, owing to longer-than-expected outages at two Australian facilities. 
  • Despite this, the energy major said it anticipates its LNG trading results to be “significantly higher” than in the third quarter. In contrast, its fourth-quarter oil products trading results are expected to be “significantly lower” than in the previous quarter.
  • In September, the EU agreed that oil and gas companies would pay 33% as tax (solidarity contribution) of profits above their average taxable profits, CNBC wrote.
  • The levy ending in March 2028 is expected to raise over $40 billion over the next six years.
  • In November, Shell’s U.K. Country Chair, David Bunch, signaled that the company would evaluate each of its projects in the country on a case-by-case basis following the windfall tax announcement.
  • Price Action: SHEL shares are up 0.81% at $55.93 during the premarket session on the last check Friday.