Shell boss says hike in levy means firm will review its £25bn plans

Supermajor Shell (LON: SHEL) is to review as much as £25 billion of UK investments following the government’s decision to ramp up the windfall tax.

UK chairman David Bunch reportedly told Sky News Shell will assess its proposed energy projects “case-by-case”.

It follows Chancellor Jeremy Hunt’s decision to raise the levy on North Sea firms’ profits by a further 10%.

It means oil and gas producers now face losing up to three quarters of their takings, with the windfall tax at 35%, and the regular levy at 40%.

Investment relief, allowing firms to claim back a large proportion of their spend on new projects, is in place to boost energy supplies.

As a result, Shell paid no windfall last quarter, despite quarterly pre-tax profits of $11.4 billion.

But in an interview with Sky News, Mr Bunch said: “We outlined an investment package five months ago of £25bn, and the one thing I said was we really need a stable fiscal environment to make sure we can get that investment out the door.

“Since then we have had three budgets, a couple of prime ministers, so it’s welcome to see some stability.

“But we are going to have to look at each of those projects on a caseby-case basis and reevaluate them, based on the current fiscal outlook, and that will determine whether or not we invest to the amount we previously discussed.”

He also called on Westminster to give further details on when the windfall tax might expire after an original sunset clause of 2025 was extended to 2028.

Shell chairman David Bunch, left, and Jeremy Hunt.