Chancellor Rachel Reeves is facing calls to investigate a proposed merger between Shell PLC (LSE:SHEL, NYSE:SHEL) and Norway’s Equinor, the majority owner of the Rosebank oil field west of Shetland.
The two companies plan to form a new joint venture, Adura, which would be based in Aberdeen and become the largest oil and gas producer in the North Sea once operational.
Campaign groups including Stop Rosebank, Global Witness and Tax Justice UK have written to the Treasury claiming the deal could enable Shell to offset tax liabilities using Equinor’s accumulated losses and allowances.
They also argue that Equinor stands to gain financially as it continues to face delays developing the Rosebank field, the UK’s largest untapped oil reserve.
"The Treasury must fully investigate the creation of Adura by Shell and Equinor to assess the legality of a deal that appears to conveniently dodge anti-avoidance provisions against ‘loss buying'," the letter said.
"If it is found that current loss-buying restrictions should apply, Adura should be prevented from inheriting Equinor’s tax reliefs.
"Whether or not such restrictions do apply, we implore the UK Government to immediately strengthen and retroactively apply tax dodging protections to prevent such deals."