Page 14 - EurOil Week 26 2022

EurOil PROJECTS & COMPANIES EurOil

Azerbaijan accounts for half of BP's upstream

payments to governments in 2021

AZERBAIJAN OVER half of the $19.725bn in payments BP Meanwhile, a mere $127mn went to the UK,
made worldwide to governments went to Azer- although this is the first time the company has
The UK meanwhile baijan last year, the oil and gas major said in a paid anything to the government of its home
received its first tax regulatory disclosure on June 24. country in at least six years. In 2020, in contrast,
payment from BP in BP is the largest foreign investor in Azerbai- it received a $42mn tax refund.
years. jan, operating the country’s flagship oil and gas Like other North Sea oil and gas producers,
assets – the Azeri-Chirag-Gunashli oil project BP does not often pay tax on its operations in
and the Shah Deniz gas development. It also the UK because of losses tied to investments in
owns the pipelines that send their production to fields. Many producers also get rebates to fund
Europe, and is involved in a number of explora- decommissioning work, including the disman-
tion prospects in the Azeri zone of the Caspian tling of platforms. As the region has grown more
Sea. mature, this has meant that in recent years they
BP’s payment disclosure covers production have received more money from the government
entitlements, taxes, royalties, fees, bonuses than they have paid. Last year, for example, BP
and infrastructure improvements relating to collected $50mn from the government in con-
upstream operations. Its payments to the Azeri nection with decommissioning work.
government amounted to $10.59bn, of which BP publishes a separate report of its total tax
production entitlements accounted for $9.96bn. contribution to countries, including corporate
A further $171.7mn was taxes, $2.8mn fees and and employer taxes, as well as production lev-
$451mn bonuses. ies and refunds, covering its entire operations
In second place, the UAE accounted for and not just the upstream business. That report
$3.24bn of BP’s government payments, followed showed it paid $263mn to the UK in 2020, with
by Oman, which received $1.68bn, Angola most of that sum relating to employer contribu-
$1.51bn and the US $1.07bn. tions. ™

Shell rules out standalone Linnorm

development

NORWAY SHELL has ruled out exploiting the Linnorm gas high-temperature field has been put on hold sev-
field in Norway as a standalone development, eral times over the years, due to technical chal-
The project has been up Reuters reported on June 24, noting that it would lenges, marginal economies and low oil and gas
in the air for years. now look at alternative options with its partners. prices, Wood Mackenzie said in a recent report.
“After discussions between the partners, There had been hopes that recently introduced
the Linnorm licence will not continue to tax incentives in Norway might help brighten the
further mature a standalone development project’s prospects.
concept,” Shell told Reuters. “The partners in As recently as January, Shell was working on
the licence will now evaluate alternative ways an unmanned spar development concept for
forward.” the field. This would have been an alternative to
Discovered in 2005, Linnorm is estimated to using an offshore platform. Under the plan, con-
hold 31.7bn cubic metres of gas, according to the densate would have been separated from the gas
Norwegian Petroleum Directorate (NPD). Shell before being stored in the spar hull, which would
operates the licence with a 30% interest, while have a capacity of 150,000 barrels.
Petoro also has 30%, and TotalEnergies and In the past, Shell also looked at using a sub-
Equinor own 20% each. sea production template, connected via a 50-km
Development of the high-pressure, pipeline to the Draugen platform. ™

P14 www. NEWSBASE .com Week 26 30•June•2022