France’s TotalEnergies mentioned it anticipated to take a $2.1bn hit from windfall taxes within the UK and EU on its earnings for 2022, with half the invoice coming from Britain.
Oil and gasoline teams have been totting up the price of levies launched in Europe in latest months to attempt to seize earnings boosted by a surge in commodities costs exacerbated by Russia’s invasion of Ukraine.
In Britain, the place Complete is the second-biggest oil and gasoline producer within the North Sea, a 25 per cent power earnings levy launched in Might was elevated to 35 per cent from January 1, taking the headline tax charge on UK oil and gasoline manufacturing to 75 per cent.
Total mentioned in a buying and selling replace on Tuesday that it anticipated a $1bn general hit on its 2022 adjusted outcomes from the UK windfall tax, with a $400mn cost mirrored in its fourth-quarter earnings.
The group mentioned in December it will reduce its North Sea investments for 2023 by 1 / 4, or £100mn, on account of the taxes, particularly as they didn’t embody a mechanism to account for any drops in oil or gasoline costs. It mentioned it will ditch initiatives together with one on the Elgin gasfield off the Scottish coast.
“The power trade operates in a cyclical market and is topic to risky commodity costs,” mentioned Jean-Luc Guiziou, Complete’s British head of exploration and manufacturing. “We imagine that the federal government ought to stay open to reviewing the power earnings levy if costs cut back earlier than 2028.”
Shell disclosed a $2.4bn hit from UK and EU levies earlier in January. BP, the third-largest oil and gasoline producer within the North Sea, has mentioned it expects to pay about $2.5bn in UK taxes in 2022, together with about $800mn beneath the brand new levy.
Non-public equity-backed Harbour Energy, which is the UK’s greatest producer, expects to pay $900mn in UK taxes this 12 months, together with $400mn beneath the levy.
Complete has to date largely absorbed the hit from taxes on its operations, in addition to writedowns on a few of its operations in Russia, as earnings soar. It mentioned on Tuesday that money stream from its liquefied pure gasoline and buying and selling enterprise would are available in greater within the final three months of 2022 than the earlier quarter, regardless of a drop in gasoline costs.
It additionally mentioned it was prone to keep the tempo of its share buybacks at $2bn for each the fourth quarter of 2022 and the primary quarter of this 12 months.
The group has come beneath strain in France to assist shoppers cope with inflation, together with by chopping petrol costs at the pump in the autumn.
Complete mentioned the hit from writing down its 19.4 per cent stake in unbiased Russian gasoline producer Novatek can be larger than initially estimated, at $4bn as an alternative of $3.7bn, due to foreign money fluctuations. Its whole writedowns on Russian initiatives final 12 months quantity to nearly $15bn.
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