What's happened
Shell and Norwegian firm Equinor announced plans to create Adura, a North Sea oil and gas company, amid concerns over tax strategies and environmental impact. Campaign groups urge UK Chancellor Rachel Reeves to investigate potential tax avoidance linked to the deal, which also supports Rosebank oilfield development. The story highlights ongoing tensions in UK energy policy.
What's behind the headline?
The creation of Adura exemplifies how major oil companies leverage complex financial structures to maximize profits while minimizing tax liabilities. The deal appears to serve dual purposes: sustaining domestic oil production and providing tax benefits for Shell and Equinor. This aligns with a broader trend of fossil fuel firms consolidating power amid climate policies that threaten their future. The timing suggests strategic maneuvering to offset losses from other projects, such as Rosebank, which faces legal and regulatory hurdles. The UK government’s investigation into the legality of such arrangements will be pivotal; failure to scrutinize these deals risks enabling continued tax avoidance and environmental harm. The story underscores the ongoing tension between economic interests and climate commitments, with the potential for significant financial and environmental consequences if these strategies go unchecked. The outcome will likely influence future energy policy and the UK’s ability to meet its climate targets.
What the papers say
The Scotsman highlights campaign concerns about tax avoidance and environmental impact, quoting campaigners like Lauren MacDonald who argue that the deal 'shows how our biggest polluters game the system.' The publication also notes Shell's assertion that Adura will contribute significantly to UK taxes and domestic energy security. Conversely, Shell defends the deal, emphasizing their substantial tax contributions and investments in UK oil and gas production. The Scotsman also discusses the broader context of project delays and cancellations in offshore wind, illustrating the shifting landscape of UK energy policy amid economic pressures and environmental debates. This contrast underscores the tension between corporate interests and public scrutiny, with campaigners warning that such deals may undermine climate goals while companies emphasize economic contributions.
How we got here
The deal follows Shell and Equinor's announcement to form Adura, a North Sea oil and gas firm, amid broader debates over fossil fuel development and tax strategies. Campaign groups have raised concerns about potential tax avoidance and environmental implications, especially in relation to the controversial Rosebank oilfield. The UK government faces pressure as some projects face delays or cancellations due to economic and political headwinds.
Go deeper
More on these topics
-
Rachel Jane Reeves is a British Labour Party politician serving as Shadow Chancellor of the Duchy of Lancaster and Shadow Minister for the Cabinet Office since 2020. She has been the Member of Parliament for Leeds West since 2010.
-
-
The Scottish Government is the devolved government of Scotland.
The government is led by the First Minister, who selects the Cabinet Secretaries, who attend Cabinet, and Ministers with the approval of Parliament.