Secret corporate structures rife in North Sea Oil - ITF
A new report released today has lifted the lid on the secretive corporate structures and aggressive tax minimisation schemes used by Chevron and other major North Sea oil producers, including Nexen, the Chinese Government controlled oil producer.
The London based International Transport Workers Federation (ITF) has released the report, Offshore Oil, Offshore Tax.
Steve Cotton, ITF General Secretary, said the report laid out in detail the secretive corporate structures used by Chevron and now copied by other oil companies.
“The concerns emerging this week about the secretive corporate structure of Nexen are rife within the oil and gas sector. The public would be shocked to see how Chevron uses a complex web of companies to route money through the Netherlands, Bermuda and other tax havens.
It has over 200 active subsidiaries in Bermuda alone.
“This at a time when there has been a dramatic reduction in tax revenue from the North Sea. In the mid 1980’s, taxes on North Sea oil production accounted for nearly 9% of all tax receipts collected by the UK Government - today it is just 0.7%.
“While production has fallen, tax revenues have fallen much further, due to tax cuts and aggressive tax minimisation schemes.
“To put this revenue slump in context British motorists paid six times more tax on petrol ($26.9 billion in 13/14), excluding VAT, than the oil and gas industry paid on all taxes covering North Sea oil production ($4.4 billion in 13/14).
“It is well documented that both Shell and BP are using similar corporate structures to reduce their tax in the UK. Both BP and Shell in 2014 paid no UK corporate tax.
“I think the public will demand action from our political leaders to get to the bottom of what this report has found. The UK Parliament needs to establish an inquiry to investigate the corporate structures used by the oil companies operating in the North Sea and the impact they have on security, taxes and royalties,” Mr Cotton said.
Unite, the largest union in the North Sea oil fields, Scottish Secretary Pat Rafferty said: “The UK government needs to investigate and step up action to clamp down on any inappropriate tax loopholes being exploited by Chevron to make sure UK taxpayers aren’t taken for a ride and it pays its fair share,” he said.
Shadow Chancellor, John McDonnell MP who has been briefed on the report said: "This thorough new research blows open the complex tax avoidance measures undertaken by a major multinational. Anyone concerned with ending the scourge of tax avoidance needs to pay careful attention to its findings. It's time to put a stop to these complex company structures that rip off taxpayers and place extra strains on public services across the globe."
About ITF
The ITF is a global union federation representing around 700 unions and more than 4.5 million transport workers from 150 countries.